Swarovski, the renowned Austrian crystalware giant, is facing the challenging effects of the Covid-19 crisis and has therefore decided to embark on a major restructuring effort. This sweeping overhaul, the largest undertaking in Swarovski’s 125-year history, involves cutting 6,000 jobs and closing multiple stores. With the approval of the company’s shareholders, the plan is now set in motion.

In a statement provided to FashionNetwork.com, Swarovski confirmed its commitment to realigning the business and implementing a new vision and growth strategy. The company recognizes the need to adapt its organizational structures and business model to ensure long-term sustainability in the face of the current economic reality. The downsizing process has already begun, resulting in the loss of 6,000 jobs worldwide. Additionally, Swarovski plans to optimize its distribution network and will be closing a portion of its retail stores.

CEO Robert Buchbauer, who faced some opposition from the Swarovski family, successfully gained support for his plan, with nearly 80% of the group’s shareholders backing him. Buchbauer’s strategy involves reducing activities in the less profitable mass consumption market and instead focusing on higher-margin jewelry products, such as rings and bracelets. This streamlining of the product range will create a more exclusive offering.

Prior to this restructuring effort, Swarovski had already laid off 600 employees in June, including 200 at its headquarters in Wattens, Austria, due to decreased demand in the USA and Asia. The company subsequently announced an additional 1,000 job cuts at its facilities in western Tirol. These moves were a response to intense competitive pressure and the ongoing impact of the Covid-19 pandemic.

Established in 1895 by Daniel Swarovski, the Swarovski Group currently employs 34,500 people worldwide. Its manufacturing facilities are located in various countries, including Austria, India, Thailand, Vietnam, Serbia, and the USA, serving customers from around 170 countries. In 2019, Swarovski generated €2.7 billion in revenue. However, with the implementation of the new restructuring plan, it is anticipated that sales will decrease by approximately one-third this year. Bloomberg estimates that it will take two to three years for the group to return to profitability under the new strategy.

Useful links:
1. Swarovski Official Website
2. Bloomberg – for financial news and analysis.