Breitling Layoffs, Swatch Profit Numbers, Tariffs And A Strong Franc: What Is Really Happening To Swiss Watchmaking in 2026

On the surface, the news that Breitling has cut more than 50 positions across its headquarters and global subsidiaries reads like a single company having a difficult year. Look at the numbers behind the headline, and then look at what is happening across the industry, and the Breitling story becomes something considerably more significant. It is a window into the structural pressures now bearing down on the entire Swiss watch industry, and a signal that the post-pandemic boom in luxury watches has not just ended but reversed.Breitling reported adjusted EBITDA of CHF 162 million for the twelve months ending March 31, a 21% slump versus the previous year. Net sales slid 11% to CHF 769 million. The layoffs, which include positions in HR, marketing, and sustainability, are part of a broader cost-cutting drive as CEO Georges Kern looks to revive a business that employs more than 2,000 people globally. 

The Swiss Franc Problem Nobody Can Fix

The single most damaging force acting on Breitling's results, and on the results of almost every Swiss watch brand, is a currency the industry cannot control and cannot hedge against indefinitely.The Swiss franc gained over 10% against the US dollar in Breitling's fiscal year. The US is the company's largest market. That combination is arithmetically brutal. A watch priced at CHF 5,000 in production cost sells for dollars in America. When the franc strengthens 10%, either the brand absorbs a 10% margin reduction, raises the price by 10% and risks losing customers, or does some combination of both. None of these options is attractive. All of them hurt.

This is not a Breitling-specific problem. Total Swiss watch exports in 2025 came in at CHF 25.5 billion, down 1.7% from 2024 and down 4.5% from the record year of 2023. Volume fell even harder, 4.8% fewer units were exported, bringing production down to near 2020 levels, when factories were closed for two months due to Covid. A falling volume figure combined with a relatively smaller value decline tells you that the industry has been raising prices to compensate for currency pressure. It also tells you that this strategy has its limits.

Swatch Group, whose brands include Omega, Tissot, Longines, Breguet, and Blancpain, reported net profits of just CHF 25 million for 2025, down 89% from CHF 219 million the year before, on sales that fell 6% to CHF 6.3 billion. A near-90% profit collapse is not a rounding error. It is a structural hit. And Swatch, unlike Breitling, is publicly listed, Swiss-owned, and has no private equity debt service obligations to manage simultaneously.

The Tariff Year That Nobody Planned For
Compounding the franc problem was a US trade policy timeline that created chaos for an industry that plans its production and distribution cycles six to twenty-four months in advance. The 39% US tariff on Swiss imports took effect on August 7, 2025, and remained in place for 99 days before being reduced to 15% in November. During those 99 days, Swiss watch exports to the US fell 56% in September and 46.8% in October year-on-year. The drop was not primarily driven by collapsing consumer demand. Brands simply stopped shipping at a rate that made customs clearance economically viable, holding inventory in Swiss warehouses or redirecting product to other markets while they waited for clarity on the trade situation.

The full-year US figure ended down only 0.5%, partially because brands had front-loaded enormous volumes into the US in the first half of 2025 in anticipation of tariff increases, and because December saw a 19.2% year-on-year surge as brands rushed to ship inventory at the lower 15% rate once it was confirmed. The headline number looked manageable.  For Breitling specifically, whose fiscal year ended March 31, the tariff disruption falls almost entirely within its reporting period. The Swiss franc's 10% gain against the dollar, the 39% tariff forcing a September export collapse, and the subsequent scramble to recover, all of this landed inside a single set of annual accounts. The 21% EBITDA decline reflects that accumulation.

The K-Shaped Recovery

What makes the Breitling situation analytically interesting is not that a Swiss watch brand is having a difficult year. Several are. What is interesting is which brands are not. Audemars Piguet revenues were up 10% in 2025 to roughly CHF 2.6 billion. Richemont's specialist watchmakers division was up 7% over the same period. Cartier and Van Cleef & Arpels posted three consecutive quarters of double-digit growth. The divergence is not random. The brands gaining ground are either at the very top of the price spectrum — where the customer base is largely insulated from economic headwinds — or they have such strong cultural positioning and allocation scarcity that demand consistently outpaces supply regardless of the macro environment. Rolex, Patek Philippe, Audemars Piguet: these brands did not just survive the tariff year and the franc appreciation. They held price increases, maintained waiting lists, and watched their secondary market values remain elevated.

Breitling, at CHF 769 million in net sales and a price positioning that sits largely in the CHF 3,000 to CHF 15,000 range, occupies the middle ground. Not mass market, not ultra-luxury. This is the part of the market where the headwinds land hardest. The customer who might buy a Navitimer or a Superocean is more sensitive to a 10 to 15% price increase than the customer buying a Patek Nautilus. They are also more likely to delay a discretionary purchase when economic confidence softens. The industry's stronger brands are pulling ahead of the pack, leaving rivals further behind. Laggards will have to double down on their efforts to catch up, all the more challenging when the market remains subdued and better-capitalised brands are not holding back on marketing investment.

Where the Light Is

The industry is not uniformly dark. Q1 2026 closed at CHF 6.2 billion in Swiss watch exports, up 1.4% versus Q1 2025 — the first positive quarter after a sustained period of decline. Modest, but directionally important. India grew 8.9% in 2025, following 25.2% growth in 2024, and the FHS specifically called out India as confirming "the rapid expansion of luxury in the country." The US, despite the tariff disruption, remains the industry's largest single market by value and showed strong December recovery. The pre-owned market, particularly for the strongest references from the top brands, continues to absorb demand that new inventory constraints cannot meet. 

The structural picture for luxury watches over a ten-year horizon remains intact. The category has compelling characteristics: mechanical craft that cannot be digitised, scarcity economics that support price discipline, and a growing global collector community that is increasingly sophisticated about what it values. The brands with the strongest positioning will likely emerge from this period with higher pricing power, not lower. The question for the brands in the middle, the ones navigating a strong franc, a disrupted US market, a contracting China, and a geopolitical shadow over the Middle East simultaneously, is whether they can manage through the current period without permanently damaging the brand equity that gives them pricing power in the first place. Cutting 50 jobs and reducing marketing spend protects the balance sheet. It does not protect brand desirability. That tension is the one Georges Kern, and several of his peers across the Swiss industry, will be navigating for the next eighteen months.