Tag Heuer, owned by French conglomerate LVMH, has reportedly dismissed 46 employees and placed 49 others on temporary unemployment until the end of the year.
Two Switzerland-based Tag Heuer factories at La Chaux-de-Fonds and Chevenez are said to be affected.
According to multiple media sources, LVMH head of watches and jewellery Jean-Claude Biver said the staff cuts were in response to the fact that watch industry sales had only increased 2.7 per cent between January and August this year. The result fell considerably short of the 4 to 6 per cent increase he had initially forecast for 2014.
The company’s decision in June to produce only one chronograph movement instead of two in order to “optimise production” was also reported to have contributed to the issue.
Biver was quoted as saying, however, that Tag Heuer would introduce a range of watches in the CHF 1,500 to CHF 5,500 (AU$1,787 to AU$6,551) price range in an attempt to secure market share in that sector.
Around the same time, high-end jewellery brand Cartier reportedly announced that from November this year, employees at one of its six Switzerland facilities would only work two days a week due to a decrease in watch sales.
While a Richemont spokesperson confirmed to Jeweller that it had introduced “temporary short-time working” for its staff at one of the Swiss facilities that produced watch cases and watch bracelets, they declined to provide further details.
Richemont attributed the decline in sales to “weak demand and destocking, particularly in Asia-Pacific”.
It was reported that approximately 230 employees would be affected by the change.
In another indication that the Swiss watch market is weakening, European financial services company Kepler Cheuvreux was also said to have reduced its sales assumptions for the sector this year from 5.5 per cent to 3.5 per cent, largely due to low levels of demand in Hong Kong.
Tag Heuer was contacted for comment but had not responded at the time of publication.