Williams say they could not have afforded to keep either Ralf Schumacher or Juan Pablo Montoya this season, had they wanted to stay, after partners BMW tightened the purse strings.
"In truth, we could not continue to afford Ralf and Juan. That's just as plain as it is," said Patrick Head, the Formula One team's co-owner and director of engineering.
"We entered a new [five-year] deal with BMW, which starts this year. It was a very, very much less beneficial deal financially and it put us in a position where we could not afford those two drivers."
A BMW spokesman confirmed that Williams, who last won a championship in 1997 with Renault and teamed up with BMW in 2000, got less money under the new deal but there were performance clauses.
Colombian Montoya, who joined McLaren this year, had in any case signalled his departure early on, signing for Williams' rivals in 2003. Schumacher is now at big-budget Toyota.
Williams, winners of nine constructors' titles since 1980, have replaced them with Australian Mark Webber, who raced for Jaguar last year, and Germany's Nick Heidfeld from Jordan.
Neither has won a Grand Prix and Webber has yet to finish a race higher than the fifth place he secured for Minardi on his debut in Melbourne in 2002.
Head said he was happy with the line-up, however.
"I actually think we have been quite lucky and have got two drivers that I think will perform very well," he said. "I don't have the view that we're going to be let down by the strength of our drivers.
"We know pretty much what McLaren are paying their two drivers and its a very, very large figure and certainly not justified by the sponsorship that the team is getting in," he added when asked about drivers salaries.
"In our case, and it's BMW's choice, they are not making any provision for that. And that's been the biggest thing behind the driver change.
"But it's a complex situation," he added. "You'd have to say that Ralf had been with us six years, Juan for four years. Whether it was us disappointed with them or them with us, neither of us had achieved what we wanted.
"So it was probably time anyway to move on and I certainly do not feel that we've taken a big step backwards."
Williams, a disappointing fourth overall last year with just one win, have invested heavily on a new wind tunnel and both Head and team boss Frank Williams have trimmed their own expenditure.
Williams has sold his private jet while Head travels from his London home to the factory at Grove near Oxford by train and scooter rather than helicopter.
"It is true to say that an airplane and a helicopter have transmogrified into a wind tunnel," said Head.
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