Swiss watchmakers feel pinch amid luxury slump

Swiss watch movements are worn on wrists throughought the world Keystone / Christian Beutler

The Swiss watch industry is going through difficult times. Suppliers of watch movements and the canton of Jura are suffering particularly badly.

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At Atokalpa, a company in the Jura municipality of Alle, everything revolves around tiny watch parts. Around 160 workers manufacture anchors, balance wheels, escapements and tiny gears for exclusive Swiss watch movements.

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“After the pandemic, our sales grew by 40% within two years. Last year, they fell by a quarter,” says Sébastien Jeanneret, General Director of Atokalpa. The decline is due to fluctuating demand in China.

“We already rang the alarm bells in 2022 and 2023 and warned our customers that the market was overheated and that it would make sense not to expand production too much.” But many watch brands did not want to hear.

Jobs being lost

Because Atokalpa did not want to lose its customers, Sébastien Jeanneret hired additional workers and bought new machines. “Now our company is not working at full capacity and we have had to let go of almost all employees who did not have a permanent contract.”

If the crisis lasts longer, Atokalpa will have to introduce short-time work and ultimately lay off permanent employees.

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In the cantonal capital of Delémont, Claude-Henri Schaller, the head of the Office for Economic Affairs and Employment, is poring over statistics. Jura unemployment was 5% in January, the highest jobless rate in Switzerland.

This is a direct consequence of the recent watch crisis, says Schaller. “The crisis has a major impact on watch manufacturers and their suppliers, but also on other industries, such as mechanical engineering.”

More than one in ten jobs in the canton of Jura is linked to the fluctuating watchmaking sector. This dependence is unpleasant, but nothing new, says Schaller. “These cycles shape the industry and we have learned to live with them.”

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The ups and downs in the watch industry have also shaped Philippe Peverelli’s working life. He was a manager in the watch industry for decades, and today he is a board member at Atokalpa, among others. He says: “The watch business is a marathon. And now we are on a difficult path that we must persevere on.”

China market shrinks

Whether you speak to the board of directors, the cantonal representative, the company manager or even a trade unionist, everyone agrees: things will soon be looking up again in the watch industry.

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Where do they get all this confidence from? Board member Peverelli says it boils down to emotional connections to watches: “When it comes to mechanical watches, Switzerland has a monopoly on the ‘heart on the wrist’.”

This means that whoever buys such a watch anywhere in the world will most likely leave the shop with a watch made in Switzerland. Perhaps less often in China in the future, but instead in the United States or South America.

Adapted from French by DeepL/mga

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