BMC applies for government assistance as cycling brands continue to suffer

Swiss bicycle manufacturing BMC has applied to the canton of Solothurn for a "short-time working" according to local news outlet Grenchner Tagblatt as the difficult economic situation in the cycling retailer sector and the industry continues to hurt brands of all sizes. 

Short-time working effectively allows a company to reduce the working hours of full-time employees during downturns, in a measure intended to reduce the potential for layoffs. 

Similar to the COVID-19-era furlough schemes seen in Britain, the arrangement means that the Swiss canton where a company is based can compensate employees up to 80% of the value of earnings temporarily lost from reduced working hours.

It is, by all accounts, a proactive rather than a reactive application, so that should the need for government assistance arise, the paperwork is already approved. However, it has surfaced at a time when bicycle companies across the world are battling tough economic conditions. 

"The board of directors and the company's management adapted to this situation in a timely manner and took appropriate preventive measures and made necessary adjustments," the BMC CEO David Zurcher is quoted as saying in the Grenchner Tagblatt report.

While this is reportedly a proactive rather than reactive measure on the part of BMC, it follows the trend we’ve seen from other brands who have struggled both during the pandemic and afterwards. 

While not acknowledged by the company officially, BMC is understood to have made several staff members redundant in the autumn of 2023.

Many brands have been hit by the combination of being unable to meet demand during the pandemic years, followed by a sharp decline in demand afterwards as stock levels soared after back-orders were fulfilled.

Companies such as Zwift and Specialized have seen layoffs, and Shimano, the world's biggest bicycle component manufacturer, has seen a 16% drop in revenue.

BMC's most conspicuous cost-cutting measure in recent months has been an exit from the WorldTour peloton in 2024. In the past the brand sponsored multiple WorldTour teams. 

BMC is however sponsoring the Swiss Tudor Pro Cycling team, which has secured a number of wildcard places at the top-flight races this year, including for the Giro d'Italia.

Short-time working can be introduced by a company following approval by the local canton, or municipal government. Following successful approval the local government pays the company in question the value of 80% of the staff wage bill, preventing the affected company from having to make layoffs.

Also read: BMC Teammachine R review

Grenchner Tagblatt also approached Swiss wheel giant, DT Swiss, about how it was faring at the moment, but was provided with no comment, and was also informed the financial officer, Frank Böckmann, would be absent for the next fortnight.

Swiss ebike manufacturer, Flyer, has also recently been affected by economic headwinds and has closed its adventure department and lay off a quarter of its employees in this branch of the business.