Two years of short-time working: Swiss watchmaking seen from below

On 27 May 2026, in Bern, the Federal Council extended an emergency measure until 31 January 2027. A company in difficulty may pay its employees short-time working compensation for twenty-four months, instead of the twelve provided for under the ordinary regime. Reduced working hours, what everyday language calls short-time working, allow an employer to cut working time without making redundancies: unemployment insurance then covers part of the wages corresponding to the hours removed. Two branches are explicitly targeted by the extension, the machine industry and watchmaking.

The twenty-four-month ceiling is not entirely new. An ordinance of October 2025 had already established it; the one of spring 2026 merely holds it a few months longer, resting on the Confederation’s spring economic forecasts, which announced no rapid recovery. What matters can be read in the calendar. Twelve months of short-time working is an air pocket you pass through. At twenty-four months, it looks more like a change of cycle that is being absorbed rather than breaking the production tool, for want of knowing when demand will return.

Where the crisis is visible

The contraction can be read neither in the shop windows nor in the results of the large groups. It can be read in the headcount of the subcontractors. The Convention patronale de l’industrie horlogère suisse, the employers’ association of the branch, counted 64,807 employees at the end of September 2025, that is 835 fewer over a year, a fall of 1.3 per cent. The proportion looks slight. It is nonetheless the first drop in watchmaking employment since the end of the pandemic.

The national average conceals a geographical fault line. Geneva, home to several of the soundest houses, gained 3 per cent in watchmaking jobs over the period. In the same time the canton of Vaud lost 4.2 per cent, Neuchâtel 3.5 per cent, Jura 3.2 per cent, Bern 2.1 per cent. These are the territories of subcontracting, where components are machined and assembly is done on behalf of the brands. The adjustment concentrates there, among those whose name appears on no dial.

One term deserves setting down, because it carries the whole affair. The house that assembled watches from parts bought outside used to be called an établisseur. The mouvementiste is the specialist in mechanisms; terminage means the final assembly and regulation, often entrusted to independent workshops. These trades live on the volumes the brands send them. When a house slows its output or brings an operation back under its own roof, the workshop that was finishing its watches does not find a replacement customer within the week.

The Confederation as the real safety net

At the end of 2025 a substantial share of the branch’s companies was using short-time working, according to the Convention patronale census. In March 2026 the State Secretariat for Economic Affairs still counted 9,961 people on reduced hours nationwide, across all sectors, with watch manufacturing among the branches the measure targets as a priority, alongside the machine industry. Without that net, the 835 posts lost would be a starting point, not a total.

Extending the aid to two years means having unemployment insurance, which is to say the community, carry part of the adjustment cost of a private industry. That is the very function of the instrument, and it produces its effect: it retains employment. The question of the exit remains. The payments stop at the end of January 2027, and the Convention patronale itself warns that the gradual withdrawal of short-time working will weigh on headcount.

Two ways of taking the shock

The Swatch Group made another choice. Rather than putting its component factories on reduced hours, it kept them running and held on to its production staff, at the cost of an operating loss in that segment in the first half of 2026. The group owns it in its half-year report: its integrated capacity and the deliberate retention of those jobs will let it, it writes, respond quickly when demand picks up. A group that owns its own workshops can bear that expense and bet on the rebound. The independent mid-sized subcontractor has neither the balance sheet nor the latitude to do the same. It cuts hours first, then posts.

The same crisis gives two pictures depending on where in the chain you stand. At the top, a player keeping its capacity by calculation. Lower down, workshops losing theirs without having chosen to.

The other end of the chain

Richemont’s board proposed to the general meeting of 9 September 2026 an increased distribution: an ordinary dividend of 3.30 francs per share, against 3.00 the previous year, that is 10 per cent more, plus a special dividend of 1.00 franc. A special dividend is an exceptional payment, decided when cash exceeds the company’s current needs. The owner of Cartier and Van Cleef & Arpels does not machine components for others, but it occupies the other end of the spectrum, that of the groups holding the desirable brands and coming out of 2025 with the means to pay their shareholders more.

The export statistics draw the same map. In July 2026, Swiss watches sold abroad rose 9.6 per cent year on year, carried by the United States, up 26.5 per cent and on their own more than a quarter of the monthly total. That American surge probably owes something to an anticipation effect, importers building stock ahead of a possible tightening of customs rules, still uncertain; the hypothesis needs confirmation. China, for its part, falls 18.5 per cent, Hong Kong does not move.

Beneath the average, the gaps are sharp. Watches whose ex-factory price, less than half the price shown in the shop, exceeds 3,000 francs gain 12 per cent by value. The 500 to 3,000 franc band loses 3.9 per cent. That is the one that feeds the upstream, the movements and the terminage of the mid-range. Its July fall only confirms, month after month, a trend already in place in the first half. The very top end, built mostly within the houses’ own walls, goes on rising; the subcontractors’ order books empty.

What this reveals

Saying that Swiss watchmaking is doing well is false nowhere and true only at the top. Exports are rising, and the groups owning the strongest brands are banking, on pieces that are dearer and fewer. That half of the photograph is known. The extended short-time working shows the other half: mid-range production, the jobs depending on it and the workshops that carry it out are holding on, for now, only because the Confederation has agreed to fund the wait.

A branch for which short-time working is extended this way has no recovery timetable. It has a bet: that mid-range demand returns before the aid runs out at the end of January 2027. If it is slow, the adjustment that has been spread out will happen all at once, and it will fall on the same cantons and the same anonymous workshops.

The upstream is only the first floor. The dividing line between those who own the value and those who make it is found higher up the chain, where the finished watch meets its buyer. After the workshop, the counter: it will fall to distribution to say which of the two speeds it has taken.

Sources: Federal Council, statement of 27 May 2026 on the extension of the compensation period for reduced working hours, admin.ch
Convention patronale de l’industrie horlogère suisse, statement on branch headcount, 16 December 2025, cpih.ch
State Secretariat for Economic Affairs, labour market situation, 2026 statements, seco.admin.ch
Swatch Group, half-year report 2026, 21 July 2026, swatchgroup.com
Richemont, results statement for the year ended 31 March 2026 and shareholder information, richemont.com
Federation of the Swiss Watch Industry, monthly commentary on Swiss watch exports for July 2026, 20 August 2026, fhs.swiss.