Recession hits America's jewellery industry

February 23, 2009

Commodity Online
NEW YORK: Global economic slowdown has hit the gold and diamond jewellery industry in the United States. The Gemological Institute of America (GIA) has cut its domestic workforce by another 9 percent in the wake of the recessionary trends that has severly affected the jewellery industry.

A GIA spokeswoman said the cuts, announced on Wednesday, would impact 103 GIA employees in the United States, 71 at the company's Carlsbad, Calif., headquarters and 32 at its New York offices.

The GIA employs a total of 1,143 workers in the United States. In addition, all salaried employees will take a pay cut of up to 20 percent, while hourly employees will lose workdays.

The company's pension plan is frozen, the spokeswoman said. The cuts come on the heels of the December layoffs at the GIA, in which the laboratory slashed its workforce by 11 percent and company executives took a 10 percent pay cut.

In addition, the GIA is offering job search assistance and unemployment information to those affected. "We had hoped the first one would be it, but we made no promises," the spokeswoman told National Jeweler.

She said the lab has been "keenly impacted" by the global economic crisis, which has stalled diamond demand worldwide and was further hampered by the slow holiday season. The GIA's global staff will remain intact, but an overseas hiring freeze is in place.

Meanwhile, Jewelers of America, a U.S. trade association for businesses serving the fine jewelry retail marketplace, has initiated a letter writing and fundraising campaign to oppose the introduction of several state luxury tax proposals on jewelry and watches.

New York State’s luxury tax measure is part of the state’s larger budget bill, whereas the State of Illinois bill is a specific piece of legislation drafted solely to create a luxury tax. Both bills would add a 5 percent luxury tax to all jewelry and watch purchases over $20,000.

“At a time when the jewelry and watch industries are facing severe challenges …the last thing we need is a discriminatory tax that penalizes businesses and workers only in certain industries,” Runci says.

JA recently joined forces with the American Watch Association to oppose the luxury tax in New York State and hired a lobbyist to advocate on the industry’s behalf. The groups have written to their members, enclosing sample letter-petitions and the addresses of New York State legislators, urging members to collect signatures from employees to add to the petitions, to underline the effect that a luxury tax could have on workers in the jewelry and watch industries.

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