Luxury Brands Reduce Staff

Posted on 12 April 2009 by Papessa

luxzury_brandsThe luxury and watchmaking industries are undergoing some strong setbacks from slowing orders and several luxury brands have begun letting go employees. Top companies already began shedding jobs last autumn. Nonetheless, as often happens in downturns, some companies are also hiring as well. The paradox is that companies look at the business downturn as an opportunity to better optimize the company competitive position, firing less performing staff and hiring others.

At Gerard Perregaux 22 employees were let go since December, at Movado 60 employees lost their jobs, at Zenith 25 employees…. The suppliers of the luxury brands are hurting as well since there are fewer sales and is less work overall. At the end of March, Roger Dubuis, a Richemont brand, laid off 65 workers, mainly in micromechanics, and last week, Franck Mueller announced layoffs of 84 workers out of a total of 500 jobs in the Geneva area.

Some companies are resorting to partial unemployment, such as Cartier.

But as entrepreneur Nicholas Hayek has said, ‘there are employees you absolutely cannot afford to lose,’ and along with the intermittent dismissals of staff at the luxury brands, there is the concomitant appearance of job advertisements and vacancy notices in the press and on their job websites.

Specifically, one still sees job ads for apprentices and qualified employees in production, micromechanics, setting, industrial design, and other areas. And employment agencies report that their luxury watch company clients tell them despite the bad economy, if they see a master watchmaker profile to send them the CV right away.

HR and recruitment specialists say that it’s the marketing and communications staff that gets cut first.

Hublot, for example, recently announced that after firing 6 staff in accounting and administration they were planning to hire 9 other staff in other areas.

From a job seekers point of view, one can surmise that in times of crisis, when companies have less budget, a general background or non-specialist experience lead to the greatest risk of job security. For example in luxury watch making, assemblers are at much greater risk of losing their employment than qualified watch makers, who have a much more elaborate vocational training and are much more difficult to replace.

Another common practice in bad economic times is to get rid of interim staff and consultants. Swatch Group and Richemont have both employed this strategy, as well as Rolex; they have all allowed the contracts of fixed term staff to expire without renewal.
Rolex has over 900 temporary staff, which provides a substantial cushion in crisis times against having to cut the jobs of regular employees.

Companies whose business is providing temporary staff, such as Adecco, have seen their business volume decreasing substantially.

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