Of late it appears that the Kering group is steadly withdrawing resources from watchmaking.
Gucci's watchmaking office in Switzerland. Source: Google Earth. Kering owns Gucci and a number of other brands. In January of 2022, word broke that Kering had jettisoned Ulysse Nardin and Girard-Perregaux. Management acquired ownership and has been operating the brands since then (unless there was another, subsequent, private party sale of ownership stakes).
The most recent step on the path to a reduction in Kering's watchmaking footprint appears to involve Gucci Watchmaking. News broke last week that Gucci's watchmaking office in Cortaillod, Switzerland has notified the trade union for watchmaking that the brand would like to dismiss 25 employees. The brand and the union have started negotiations regarding the possible layoffs.
Such steps are usually the last that a business will take, typically only under the most challenging and fraught financial circumstances. As I wrote not long ago, Switzerland offers a program in which the government will cover part of an employee's pay while a business temporarily reduces their hours of work and the amount that the business pays. This program, RHT, does have a limit on how long an employee can collect supplementary pay. Once that limit is reached, a business may begin looking at termination of employment.
In my prior post on RHT, I discussed the possibility that many watch industry employees may be towards the end of their RHT benefit. It remains to be seen if Gucci's watchmaking division is just the "leading edge" of more layoffs that will spread to other brands as additional employees reach the end of the RHT benefit. Even under such circumstances, there are still ways to avoid these layoffs, though, which includes a lengthening of the RHT benefit's eligibility period.
It isn't necessarily the case that Gucci's struggles are emblematic of common challenges throughout the watchmaking industry. Howeover, the brand is certainly a player in advanced watchmaking. Take, for example, the 25H Minute Repeater, a timepiece with two of the more advanced complications in high horology (a tourbillon and a minute repeater). One of the bigger risks in going down the road of layoffs is that the skilled craftspeople who can create such timepieces may shift to other industries, resulting in a longer-run shortage in the supply of watchmaking skills. Hopefully, a change in government policy or sales would avoid that kind of thing. We will undoubtedly learn more in coming months.
My book on the history of Rolex marketing is now available on Amazon! It debuted as the #1 New Release in its category. You can find it here.
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