India’s once household bicycle brand, Atlas Cycles recently announced that it has laid off about 700 employees as the company closes its last manufacturing unit in Delhi-NCR due to the lack of capital to run operations.
However, company Chief Executive Officer NP Singh Rana claimed that the shutdown is temporary and the operations will be resumed once the company is able to raise ₹50Cr. The company plans to raise the capital by selling surplus land.
“We have not closed down the plant. In fact, there has been a lot of misinformation…The plant is very well open, we have not terminated any employee. We have only temporarily suspended the operations,” said Rana.
In the official letter announcing the decision, Atlas Cycles wrote: “Post lifting of lockdown with effect from June 1, 2020, Sahibabad Unit of the company is not in a position to resume manufacturing operations due to financial constraints. Hence, the workforce of Sahibabad Unit of the company will be laid off with effect from June 3, 2020, till adequate arrangement of funds is made.”
While the company said it laid off 431 remaining employees, the workers’ union claimed there are about 500 other temporary employees. CEO Rana insisted that the 431 employees continue to be on the roll of the company and will be paid “lay-off wages” upon marking attendance daily.
Ironically, the factory was shut down on June 3 which is celebrated as World Bicycle Day. Earlier in February 2018, Atlas Cycles closed its manufacturing plant in Sonepat, Haryana while its Malanpur plant in Madhya Pradesh ceased operations in 2014.
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