Zenith targets watchmaking’s top tier as half its Le Locle jobs face the axe

Zenith is planning a major restructuring that could eliminate half the jobs at its watchmaking manufacture in Le Locle, canton Neuchâtel. The brand, owned by French luxury group LVMH, informed employees on Thursday morning, 22 October, that around 100 of the site’s 200 positions could go. Roughly another 100 jobs are at risk outside Switzerland as Zenith prepares to focus on watchmaking’s highest segment, known as haute horlogerie.

The proposed cuts combine a strategic shift with far-reaching changes to the company’s operations. A consultation on collective redundancies has opened in Switzerland, meaning the figures represent planned reductions, not dismissals already confirmed. Nevertheless, employees face considerable uncertainty: at Le Locle, one job in every two is potentially affected.

A new business model for Zenith

Zenith has been seeking fresh momentum for some time. Its leadership is now pursuing a stronger position at the very top of the luxury market. Haute horlogerie describes sophisticated watchmaking that emphasises technical ingenuity, elaborate finishing and craftsmanship. It is not, however, a uniformly defined price category. The announcement alone therefore offers no basis for predicting future retail prices or production volumes.

The company intends to reshape its operations around that strategy. Alongside the potential reductions at its Neuchâtel manufacture, Zenith plans to shrink its international distribution and boutique network, where around 100 further jobs are threatened. The restructuring would consequently reach both the Swiss production site and the organisation responsible for selling its watches abroad.

It remains unclear which departments in Le Locle would bear the cuts, or which overseas boutiques and distribution operations could disappear. Zenith has also yet to specify which models would underpin its new positioning or the timetable for introducing them. The strategic direction is clear; how it translates into practice will matter greatly to employees and business partners.

Management sees a permanently changed market

Benoit de Clerck, who has led Zenith since January 2024, addressed employees on Thursday morning. He explained the move by pointing to difficulties in what he described as the middle segment of the market. His assessment went beyond a temporary sales slowdown: management believes market conditions have changed permanently.

De Clerck cited the strong Swiss franc, American tariffs and declines in important markets including the Middle East and Asia. He also referred to restructuring announcements by competitors, among them Montblanc’s recent announcement in Le Locle. In doing so, he placed Zenith’s planned overhaul in a broader context rather than attributing its difficulties solely to internal factors.

Exchange rates are particularly important for Swiss watchmakers. A substantial share of their costs is incurred in Switzerland, while their products are sold worldwide. A strong franc can make them less competitive abroad or squeeze their margins. Tariffs create additional obstacles in export markets. The extent to which each factor has affected Zenith, however, cannot be quantified from the details available so far.

De Clerck highlighted the brand’s history, watchmaking expertise and distinctive movements as strengths. These qualities also appear set to underpin the repositioning. Whether concentrating on the highest segment can deliver a lasting improvement in Zenith’s financial position remains to be seen.

Le Locle’s industrial fabric is at stake

The announcement hits a town whose identity is closely bound to the watch industry. Together with neighbouring La Chaux-de-Fonds, Le Locle forms the UNESCO World Heritage site recognised for its watchmaking town planning. Here, watchmaking is more than an export business: it shapes training, careers and the surrounding economy.

The potential loss of around 100 positions therefore carries significance beyond Zenith itself. Specialised skills and well-established working processes are central to a watchmaking manufacture. Cuts on this scale raise the question of how the company would retain the expertise its new strategy requires. An ambition to grow at the highest end of the market makes technical knowledge and craftsmanship particularly important.

Potential effects on local suppliers and service businesses have not been quantified. Nor is it known which occupational groups would be affected. The scale within the company is clear, however: halving the workforce would fundamentally change the Le Locle operation. For the town, the announcement concerns the substance of its industrial base as well as individual livelihoods.

What the consultation means for employees

The consultation now under way is the next decisive stage. Under Swiss employment law, staff or their representatives must have the opportunity to put forward proposals when collective redundancies are planned. Those proposals can seek to avoid dismissals, reduce their number or soften their impact. Consultation is therefore an essential part of the process, but it does not guarantee that jobs will be saved.

No details have yet been given about how long the consultation will last, whether there will be a social plan to support affected staff, or the precise restructuring timetable. Those unanswered questions leave employees without a clear picture of when decisions might be settled or what support could accompany any redundancies.

For the workforce, the immediate priority is whether the proposed cuts can still be limited. For Zenith, the central challenge will be reconciling a more demanding market position with a substantially smaller organisation. The outcome will determine not only the scale of job losses, but also how the brand puts its new direction into practice.