Swiss Watch Industry Faces First Employment Decline Since Post-COVID Era

The Swiss watchmaking sector recently recorded its first employment reduction since the period following the COVID-19 pandemic, signaling a challenging economic climate. This decline, amounting to 835 positions or a 1.3% decrease in 2025 compared to the previous year, underscores the current difficulties faced by watch manufacturers and their suppliers. The downturn is attributed to a combination of reduced consumer demand, broader economic uncertainties, and international trade obstacles.

According to a report from the Convention Patronale de l'Industrie Horlogère Suisse (Employer's Convention of the Swiss Watchmaking Industry), the industry is navigating a "demanding economic environment" characterized by lower sales volumes and a general slowdown in global consumption. This situation has led to a significant contraction in the workforce, impacting a sector that is a cornerstone of the Swiss economy.

A notable factor mitigating the severity of job losses has been the widespread adoption of Switzerland's 'short-time work' (RTH) program. This government initiative enables companies to reduce employee hours while avoiding outright layoffs, thereby preserving jobs and critical expertise within the industry. The program's extension to 24 months from its original 18-month duration reflects the persistent nature of the luxury watch market's slump. While the Convention Patronale (CP) acknowledges the RTH program's vital role in maintaining employment stability and continuity, it also cautions about future risks. Should the current economic pressures endure or intensify, the industry could face more substantial challenges in 2026, potentially necessitating further workforce reductions despite ongoing adaptation efforts.

The Swiss watch industry, which sustains approximately 65,000 jobs, is a crucial component of the national economy, with watches and their intricate movements consistently ranking among the top five export categories. However, geopolitical instability, including ongoing conflicts in the Middle East and Ukraine, coupled with decelerating economic growth across Europe and notably in China, has dampened demand for Swiss-made timepieces in various global markets. Furthermore, fluctuating tariff rates, particularly those imposed by the U.S.—the largest single market for Swiss watches, accounting for nearly a fifth of total exports—have disrupted established trade channels throughout 2025. Although an agreement was reached in November to reduce U.S. tariffs on Swiss goods to 15% from 39%, overall Swiss watch exports still saw a 1.6% decline year-over-year, reaching CHF 21.2 billion by the end of October.

The last recorded annual dip in Swiss watch industry employment occurred in 2021, a direct consequence of the temporary sales decline and trade disruptions caused by the COVID-19 pandemic. The sector subsequently experienced a robust recovery, driven by a surge in watch demand and unprecedented price increases in the secondary market for highly sought-after models. This boom eventually plateaued. In stark contrast, the Global Financial Crisis of 2009, triggered by the subprime mortgage collapse, inflicted a far more severe blow, resulting in an almost 8% plunge in employment, equivalent to over 4,000 lost jobs. Despite the current downturn, the industry has managed to create approximately 15,000 new jobs since that earlier crisis.

The recent decline in employment within the Swiss watch sector highlights the ongoing struggle to adapt to an increasingly complex and volatile global economic landscape. Stakeholders are closely monitoring market developments and policy changes to navigate these headwinds and safeguard the industry's long-term prosperity.