Zenith to cut up to half its Le Locle staff and drop most core watch lines in high-end reset

Zenith will cut up to half the workforce at its Le Locle manufacture and overhaul its business over the next three years, repositioning the LVMH-owned watchmaker as a low-volume, high-horology house. Chief executive Benoit De Clerck announced the restructuring to staff this week.

The first wave could eliminate as many as 100 positions, roughly half of those at the manufacture. Company figures warned that up to another 100 roles could follow as part of the reorganisation, including the brand's entire international team, with the changes to be completed by 2029.

Management and executives have opened a formal consultation process with employees that runs until November 12. Unia, the Swiss trade union representing workers at the manufacture, will meet staff next week and join management in that process, according to people familiar with the matter.

"We confirm that a staff consultation process was initiated today concerning a proposed strategic repositioning of the Maison," Zenith management said in a statement on Thursday. "Out of respect for this process and for the employees with whom discussions are being held, we will refrain from providing any further information."

The maison, founded by Georges Favre-Jacot in Le Locle in 1865, is known for the El Primero high-beat chronograph movement. Under the plan it will stop making many core catalogue models, including the Chronomaster, Defy and Pilot lines, and concentrate on haute horology.

That focus mirrors Zenith's GPHJ award-winning GFJ models, named for the founder's initials. The brand will keep supplying movements, including the El Primero calibre, to other LVMH houses such as Tiffany, Hublot and Bulgari, though those inter-group orders have not been enough on their own.

Zenith's watches are in the mid-tier, priced between CHF 7,000 and about CHF 12,000, a segment De Clerck told employees has become unsustainable. Speaking to staff, the executive cited the strong franc, US import tariffs and falling demand in the Middle East and Asia for the loss-making streak.

"All of us in our segment, which is described as mid-range, are going through a very difficult period," De Clerck said, according to Le Temps, which obtained a transcript of the address. "The strong franc, US tariffs, the decline of key markets such as the Middle East and Asia: this is not a passing patch of turbulence."

"The market has changed for the long term," the CEO continued. "Zenith is not immune to this situation. Yet our house has real strengths to offer: our history, our expertise, our exceptional calibers." He added that no company can lose money indefinitely.

LVMH acquired Zenith in 1999. The group, born in 1987 from the merger of Louis Vuitton and Moët Hennessy, has surfaced the same headwinds elsewhere: we reported that LVMH grew just 1% last quarter as fashion and leather goods slid 5% on China.

De Clerck framed the move as a choice. "By implementing a profound change to its business model with a move to high-end timepieces, Zenith is choosing recovery," he told staff. The manufacture's significant after-sales operations will continue, including its stock of more than 1 million components.

That service arm lets Zenith repair almost any watch or clock from more than 100 years of production. The brand's history is full of near-collapses: for much of the 1970s its Chicago owner, Zenith Radio Corporation, ordered movement production switched entirely to electronic quartz.

Engineer Charles Vermot defied that order, hiding stamps, plans and El Primero components in an attic section of the Le Locle manufacture. When Ebel and Rolex later needed a reliable chronograph movement, Zenith supplied the El Primero, a decision that saved the company at the time.

Zenith's production capacity at Le Locle is now significantly underutilised, a structure De Clerck acknowledged is "sized for far more than we sell, which weighs heavily on our costs." He also pointed to competition against houses with far greater marketing power.

The restructuring follows cuts at IWC, Montblanc, Chopard and Breitling. Swiss watch exports hold record values around CHF 25 billion a year, but volumes have nearly halved over the past decade, squeezing mid-tier names such as Zenith.

A sector under pressure

Component makers are feeling the strain too, with Audemars Piguet, Rolex, Patek Philippe and Richemont investing in or acquiring suppliers to keep them running. De Clerck noted rival Montblanc announced cuts in Le Locle only days before Zenith's own announcement.

Executive changes are also spreading across LVMH watch brands: senior managers overseeing Daniel Roth and Gérald Genta have departed, TAG Heuer changed its CEO, and former AP chief François-Henri Bennahmias arrived as a consultant at Hublot amid its own sales downturn.

Support the content you love — it’s free 🎉

Add Worthbury as a preferred source on Google. Our stories will be more likely to appear in Google’s Top Stories. It’s free and supports our team. Thank you!

Add as preferred source

You can remove us any time in Google’s source preferences.

This briefing is published daily using an AI-powered system crafted by Worthbury's team and finely tuned to meet our editorial standards. While we continuously test and review the output, mistakes can sometimes happen. Tell us if you spot one.