MILAN – Crystal giant Swarovski is to cut 290 more jobs at its production facility in Watten, Austria, and invest 120 million euros, or about $168 million, in modernizing the plant in response to the current economic malaise and competition from producers in emerging markets.
The family-owned company, which counts two-thirds of its production in the euro-zone, has seen revenues and earnings dented by rising inflation, the weak dollar and competition from producers in China and Egypt who have been competing on price for specialized cuts of crystal.
It is the second wave of cuts at the facility this year. More than 700 employees, roughly 10 percent of the workforce, will have lost their jobs there by Dec. 31, as the company seeks to reduce the plant’s capacity to 6.000 heads.
“We’re not facing a crisis, but we want to prevent one. We have to react,” a Swarovski spokesperson said Wednesday, adding that full-year revenues from crystal are forecast to hit 2 billion euros, or $2.83 billion at current exchange, compared to actual sales of 1.9 billion euros, or $2.6 billion at average exchange, in 2007.
Swarovski, which has operated sites in and around Watten since 1895, is also evaluating whether to shift part of its production to India or China inside 2010. It already has plants in eight other countries including the Czech Republic and Thailand.
“We want to keep the business growing while maintaining financial autonomy,” the spokesperson said.