Luxury goods group Richemont, parent Chloé, Alaïa, and Cartier, has confirmed that it will cut up to 350 jobs in Switzerland in what analysts say could signal a lasting weakness in the Swiss watch industry. On Monday, Richemont confirmed a Swiss newspaper Le Temps' report, which cited an internal memo, stating that the company would be cutting up to 4 percent of its Swiss workforce given tough market conditions and the Swiss franc's strength that has weighed on tourist visits.
"Richemont would not consider jobs cuts in its production facilities if it was foreseeing an imminent rebound in the watch industry, in our view," analysts at JPMorgan Cazenove told Reuters on Monday. "Watch production employees are skilled craftsmen, and it takes time to train them."
Richemont's portfolio, which also includes the Vacheron Constantin, Piaget and Montblanc brands, employs around 9,000 staff in Switzerland. The conglomerate said last month that business was “likely to remain challenging after sales fell 4 percent in the final three months of 2015, with the Hong Kong market remaining weak and Islamist attacks hitting tourist spending in Europe,” per Reuters.
The move does not come as a total shock, as several watch makers have cut jobs in recent months, including Kering's recently acquired Ulysse Nardin and privately-owned Parimigiani and Christophe Claret. According to Reuters, “The industry is having to adapt to a market with fewer Russian, Middle Eastern and Chinese buyers than a year ago, feeling the combined effects of record low oil prices and signs of economic weakness in China.”
Swiss watch exports fell 7.9 percent in January year-on-year and in nominal terms after falling 3.3 percent in the full year.