The luxury watchmaker Richemont plans to slash 350 jobs from its operations in Switzerland. The company blamed the strong Swiss franc and fewer tourists for the move, which led to the revaluation of their production capacity.
Richemont is the first large Swiss watchmaker to react to problems in the industry by cutting jobs. So far, it is only suppliers to the industry that have announced job cuts. The firm employs 30,000 people around the world, 9,000 in Switzerland. The company, which is based in Geneva, owns numerous luxury brands such as IWC, Cartier, Piaget and Jaeger-LeCoultre. Some staff may be able to transfer within the company.
The strength of the Swiss franc has made the timepieces more expensive in markets such as China and the United States. The value of Swiss watch exports fell by 3.3% in 2015, thanks largely to a decrease in demand from Hong Kong.
Many timepieces make their way from Hong Kong to mainland China, but demand there has been declining because of a slowdown in economic growth and a government crackdown on luxury items being used to bribe officials.
Revenue from Swiss watch exports has fallen to just under the benchmark CHF22 billion ($21.7 billion) barrier that the industry managed to surpass in 2014.
In 2015, sales of smartwatches overtook sales in the traditional Swiss watch industry. Apple’s smartwatch had a key role to play in this growing market, as it occupies a market share of 63%, according to analysis company Strategy Analytics.
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