Sri Lanka’s garment industry is bracing for a major upheaval as MAS Holdings, one of the country’s largest apparel manufacturers, announced plans to close two factories and reduce staff at another, putting approximately 26,000 jobs at risk. The company, owned by the Amalin brothers, currently employs nearly 96,000 people nationwide, and management says the workforce needs to shrink to 70,000 to maintain profitability. The restructuring will take place in several phases, beginning with the recent closure of the MAS Kreeda Methlia factory at the MAS Textile Park in Thulihiriya. The MAS KREEDA Vanavil factory in Vanavil is also scheduled to close in the near future, while workforce reductions are planned at MAS Bodyline in Horana.
Industry insiders warn that additional closures may affect factories operating in Export Processing Zones under the MAS Active division, signaling broader challenges for the country’s ready-made garment sector. MAS Holdings is known for producing clothing for global brands including Victoria’s Secret, Nike, Adidas, Lululemon, Calvin Klein, and Tommy Hilfiger, which makes the impact of these closures particularly significant for Sri Lanka’s export economy.
Despite the scale of job losses, MAS Holdings has stated that affected employees will receive relief measures, including three months’ salary, compensation payments, and opportunities to be reassigned to other factories within the group. Management emphasizes that the restructuring is necessary to remain competitive in the global market, where rising operational costs in Sri Lanka—including labor, electricity, and water—are placing pressure on profit margins.
The company’s decision also highlights the growing challenge posed by international competition. Labor costs in India, now the world’s fourth-largest economy, are significantly lower, and operational expenses such as electricity and water are cheaper compared to Sri Lanka. As a result, MAS Holdings plans to reopen some factories in India that were previously closed, shifting part of its production overseas.
Economists warn that the closure of factories and workforce reductions could have broader implications for Sri Lanka’s economy, particularly in regions heavily dependent on garment manufacturing. The sector accounts for a significant portion of the country’s export revenue, and sudden layoffs may exacerbate unemployment rates while impacting local communities reliant on these factories for their livelihoods.
Workers’ unions and industry observers have expressed concern over the scale and speed of the planned closures. Many argue that while the company’s global competitiveness is important, the government and industry stakeholders should step in to support displaced workers, ensuring that job losses do not translate into long-term social and economic hardship.
