MacFarlane takes an assistant coaching position under new manager Keith Andrews.
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Sam Saunders has now been named Brentford B manager.
Andrews said: “Neil has been at the football club for a long time; he understands the club’s values and culture.
“The values that our B-team players come into the first-team environment with are so important.
“The collaboration and alignment with the B team is something I really want to push and hopefully bring to new levels.
“Neil is a greatly experienced coach and will make a seamless transition to this role.”