Judgement Day looms for Swiss furlough scheme

A decision is expected at some point this spring as to whether Switzerland’s ‘réduction de l’horaire de travai’ (RHT) scheme will be extended beyond its current end point of July 31.

Essentially a furlough scheme, the social insurance system is in place to protect employers in economic downturns, by guaranteeing to pay employees in full that have their hours reduced to keep costs down.

Watch businesses (both brands and suppliers further down the production chain) have taken advantage of the programme, which was introduced in its current form in 2024.

Although 12 months is the standard period during which employers can take advantage of the insurance scheme, this length of time has twice been extended — to 18 months in June 2024 and then to two years last October.

If no extension is granted by the Swiss Federal Council then this period of time will be reduced back to 12 months after July 31, which would significantly impact Swiss companies’ room for manoeuvre, especially against the backdrop of geopolitical mayhem in the Middle East, a stubbornly strong Swiss franc, tariff uncertainty in the US, and a limp collective European economy.

With Swiss watch exports falling 1.7% in value in 2025 compared with 2024 — which itself was down on 2023 — plenty of small- to medium-sized Swiss businesses in the watchmaking ecosystem will see the impending decision as existentially important, not least because Swiss exports volumes are down even more dramatically (-4.8%).