Swiss Watch Suppliers Seek Government Help: Shortening Working Hours to Tackle Market Challenges

According to Swiss media reports, about 40 companies related to the watchmaking industry have applied to the government of the Jura region to shorten working hours. This news has been confirmed by the head of the Jura Chamber of Commerce.

The Jura region is the heart of Switzerland’s watchmaking industry, home to manufacturing workshops of well-known brands such as Audemars Piguet and Vacheron Constantin. Faced with a 3.3% year-on-year decline in watch exports in the first half of 2024, these suppliers are compelled to take action.

As of July 2024, the number of manufacturers applying to shorten working hours has increased to 40, involving about 2,000 workers. These companies hope to reduce the risk of layoffs and ensure employee income through the government’s short-time work program.

It is reported that the Economic and Employment Office of the Jura region will cover 80% of the income loss caused by reduced working hours for employees. This means that companies can maintain the basic income of workers while reducing working hours. The significant decline in Swiss watch exports, particularly the reduced demand in the mid to low-end market, has forced many brands to cut orders, subsequently affecting upstream suppliers. Data shows that the export volume of watches priced above 3,000 Swiss francs has seen the smallest decline, while exports of watches priced between 200 to 500 Swiss francs and 500 to 3,000 Swiss francs have dropped significantly. Despite the overall market demand being sluggish, high-end watches still maintain a certain market demand. The export of high-end watches priced above 3,000 Swiss francs has only fallen by 0.5% in the past year, indicating that the high-end market remains relatively stable, with consumers still willing to pay a premium for quality.

Experts point out that if some brands experience a reduction in orders of 50% or even 70%, it will severely impact suppliers. Companies are applying for short-time work from the government to cope with the market downturn, which not only helps avoid layoffs but also improves employee productivity when production resumes.

Well-known watch manufacturing tool companies, such as Recomatic, have already arranged for some employees to implement shortened working hours as of June 2024. Although this is only a temporary measure, it also reflects the adjustment trend within the industry.

In Switzerland, if companies need to reduce working hours due to economic recession or other reasons, they can apply to the government for short-time work to ensure that employees are not laid off. This policy has become an important means for companies to self-rescue amid current economic challenges. Experts predict that as the global economy slowly recovers, demand is expected to rebound, and companies should be prepared to face future challenges.