Brought to you by Investec Switzerland.
Richemont’s plan to slash 210 watchmaking jobs in Switzerland is sending shockwaves from Geneva to some of the country’s remote mountain villages, the cradle of high-end watch manufacturing.
In Le Sentier, a town perched in the middle of the Jura mountain range, straddling the border between France and Switzerland, some 400 people protested Thursday against plans to cut the workforce of Vacheron Constantin and Piaget. Forty of the positions destined to go are in the Joux Valley, a rural area about 40 miles (60 kilometers) from Geneva that’s home to luxury timepiece makers including Audemars Piguet, Blancpain, Jaeger-LeCoultre and Breguet.
“We live in anxiety now,” said Alemao Ricardo, a 48 year-old Portuguese who works in the nearby town of Le Brassus decorating Vacheron Constantin watches, which sell for as much as $150,000. “It could be me going, it could be my colleague.”
Swiss watch exports had the biggest monthly drop in seven years in October, with plunging demand in almost every major market. After churning out more than 20 million timepieces annually for two decades, demand is drying up. The downturn is now a threat for smaller Swiss towns and larger cities including Geneva, which have been making watches for centuries and where almost 60,000 people work in the sector.
“We fear other job cuts in the months to come, we need to remain mobilized,” Noe Pelet, a Unia labor union representative, told a crowd of protesters in the central square of Le Sentier. “We don’t know how other watchmakers and companies in the Joux Valley will react. The vendors are suffering particularly of this situation.”
Richemont, based in the lakeside town of Bellevue, just outside Geneva, surprised investors Nov. 4 when Chairman Johann Rupert abolished the CEO position in the company’s biggest management shakeup since 2009. The job cut announcement came 10 days later. It affects three locations, including Geneva and a town called La Cote-aux-Fees in Neuchatel. About 300 people demonstrated against the job cuts in Geneva Thursday, Unia said.
Slumping demand in Asia spread to Europe and the U.S. this year, forcing Richemont to buy back unsold inventory from retailers and refocus on more affordable pieces.
The union is asking Richemont to consider other measures, such as partial unemployment. The company isn’t open to that because a strong rebound in demand for gold and jewelry watches is unlikely, a Richemont spokeswoman said.
“Our region has almost 200 years of tradition in the watchmaking industry,” said Nicolas Rochat Fernandez, 33, a lawmaker representing Le Sentier in the local cantonal parliament. “We need a strong industrial footprint here. We need jobs. If things start going badly, everyone will suffer.”
Some feel the pinch already.
“People are buying less,” said Armand Roch, a butcher who’s been present at Le Sentier’s Thursday market for 36 years. “I am worried about the future. We will feel the impact, if these jobs go. We risk losing our butcheries, our bakeries, our savoir-faire. ”
By Albertina Torsoli (Bloomberg)
For more stories like this on Switzerland follow us on Facebook and Twitter.