The manufacturer of packaging machines Bobst has become the latest Swiss company to announce job cuts as a result of the strong Swiss franc.

The company will axe 420 jobs by the middle of 2013 from its sites in Lausanne, according to a statement issued on Tuesday.

The losses are expected to be channeled through the suspension of short-term contracts, early retirements and natural wastage. It expects to make SFr77 million ($85.4 million) in savings this year and another SFr85 million in 2011.

Director general Jean-Pascal Bobst said he regretted “the impact the global economic changes and the exchange rate have had on the personnel situation” but the company had to take “radical measures to ensure its competitiveness”.

The company was at a disadvantage with 50 per cent of its salary costs being made for Swiss employees, while more than 90 per cent of sales are in Europe, Asia and America, said the director general.

Bobst foresees returning to profit by 2013. It employs around 5,300 people worldwide. It made a SFr27.7 million loss in the first quarter of 2011, compared with SFr23.5 million in the same period in 2010.

Over the past two weeks five other major employers announced their were slashing about 6,000 posts.

The unemployment rate, currently at 2.9 per cent, is expected to rise to about four per cent within the next 14 months, according to the economics ministry.

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