MILAN — Swarovski is to cut 290 more jobs at its production facility in Watten, Austria, and invest 120 million euros, or about $168 million at current exchange, to modernize the plant in response to the current economic malaise and competition from producers in emerging markets.
The family-owned crystal giant, which counts two-thirds of its production in the Eurozone, has seen revenues and earnings dented by rising inflation, the weak dollar and producers in China and Egypt that have been competing on price for specialized cuts of crystal.
It is the second wave of staff reductions at the facility this year. More than 700 employees, roughly 10 percent of the workforce, will have lost their jobs there by Dec. 31.
“We’re not facing a crisis, but we want to prevent one; we have to react,” a Swarovski spokesman said, adding that full-year revenues from crystal are forecast to hit 2 billion euros, or $2.83 billion at current exchange, compared with 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 by 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 spokesman said.