Order books, particularly of exporting Swiss industries continued to empty during the second trimester, with orders falling strongly. Inside analysts say the the drop in business is as bad as it was in 1991.

Sales figures registered a 13% drop with respect to the same period in 2008. Output dropped 15% according to the Federal Statistics Office (OFS).

The results support the arguments that a return to a robust health will take considerably more time for Swiss exporters.

Bulgari is preparing to let go 50 staff at Daniel Roth and Gérald Genta Haute Horlogerie SA. The administrative center in Meyrin is expected to bear the brunt of the cuts with 45 of the 50 layoffs. The management at Bulgari has already discussed with staff the company’s intention to drastically reduce headcount at the two brands.

Dow chemical will be closing its European offices at Morges and concentrate its activities in Horgen (Zurich). After the purchase of its competitor Rohm Haas the American chemical group had two centers in Switzerland. Roughly 40 staff were offered a job at the Horgen offices. Before announcing the definitive closing of the Morges offices, 25 staff had already left on their own.

Elsewhere, numerous companies have been launching restructuring programs in response to the poor economic climate.

Since the beginning of the year, Holcim, Swiss Re, UBS, Credit Suisse, and Adecco have all eliminated thousands of jobs. Holcim (cement; St. Gallen) reduced its headcount by nearly 10,000 workers, down to 81,500.

In April Swiss Re announced the elimination of 1200 jobs and a cost reduction program to save CHF 400 million. En 2009, the management expects a saving of CHF 150 million.

UBS cut 4400 jobs through end June, to settle at 71,806 staff, and there are a further 4800 jobs to be cut, according to management. Last spring UBS put some of its staff on partial unemployment – a watershed event: no Swiss bank had ever done that before. The measures actually were directed at their HR recruitment staff. Zurich accepted the request; the canton of Vaud refused it.

In July Credit Suisse indicated it cut 4900 jobs. At the end of June the Bank has 46,700 staff.

ABB wants to economize $ 2 billion, with the half the savings accrued in 2009 but has so far not made any major staff cuts.

According to the Swiss association of creditors, the data for May shows a steep rise in bankruptcies.

Close to 450 bankruptcies were registered last month, making the fourth consecutive month where bankruptcies exceed 400 per month. So far 2009, there have been more than 2100 companies declaring bankruptcy.

A large percentage of these companies are young companies, start-ups and PMEs.

Nonetheless, extrapolating these figures gives an estimate of over 5000 bankruptcies for 2009 in Switzerland, something not seen in Switzerland since 1974.

In May there were 2600 new companies (roughly 10% less than last year in May) registered with the Chamber of Commerce. The number of firms struck from the lists rose 20% to 200 companies.

To put these numbers in perspective, in 2004 there were 460,000 companies registered (the period of the last recession) and this number rose to 515,000 in January 2009, thus an overall rise of 55,000 companies. The number of SARL companies rose 90% of the same period and the number of individual companies (i.e., independents or ‘INC’s) rose 40%. SA companies rose 25% during this same 5 year period.

In 2008, almost 60% of the surveyed companies were less than 5 years old, as opposed to 48% in 2004. And only 23% of registered companies are older than 10 years.

Analysts say that the high proportion of young companies is an important risk factor for the economy. For one, these companies have less funds for investment and also tend to suffer first in economic downturns when overall business decreases.

Analysts are asking whether financing structures are appropriate for the needs of younger companies. Specialists are asking whether the government can play more of a role in fostering or godfathering younger companies if the options are scarce in the private sector.

Surprisingly, amid the general steep rise in companies declaring bankruptcy, personal bankruptcies actually decreased in May to 503, a drop of 7.7%. From January to May the drop was even steeper – down 11.5% to 2420 bankruptcies.

The polemic over the ultra-high salaries, remunerations and compensation packages of top managers continues to rage. Over the past 30 years, the multiplier between the least well-paid and most highly paid workers has continued to grow, from roughly 20 – 25 in 1980 to over 500 in 2008. The shining incompetence of many of these top paid executives — particularly in the finance sector– which has brought several venerable financial institutions to the brink of ruin, has put in relief the absurdity of the market’s valuation of these jobs and these executives professional skills.

When last month it was published that the new CEO of ABB had obtained a CHF 19.2 million annual salary, commentators in the press and specialists on governance were scandalized, particularly in view of the climate of economic meltdown, in which the business world was supposed to have learned that such high salaries were based on fictitious metrics of added value. These commentators remark that market principles should dictate that executive compensation falls drastically in a period when profits plummet and there are mass layoffs. Not so, it appears. Rather, there is an enormous discrepancy between the logic and the widely held public opinion, and themarket principles that appear to operate.

While all over the planet companies being helped by governments are being forced to cap salaries, those that have not as of yet need public rescue are also re-thinking their compensation packages. Consultancies specializing in executive compensation have reported a large movement among industry to follow the trend to restructure corporate salary scales after the forced shake-out in executive compensation in the financial / banking sector.

An important factor apparently limiting reform is the global market for CEOs, and consequently their salaries are set as a result of international norms based presumably on supply and demand. The new thinking in the progressive fringe of executive pay reform is to define a base salary relative to the market in which the executive is operating and linking the variable / performance part of the executive’s compensation to such indices as employee satisfaction and the long term development of the business, looking beyond simple short term profits. Clearly, one of the lessons bitterly learned has been that enormous bonus compensation was disbursed based on short term profits which were subsequently revealed to be figments of accounting, vaporizing into staggering losses.

Management schools, academic institutes, government officials and itinerant consultants are now sagely speaking of pay relative to “long term results.” Professors at the University of Lausanne and at IMD have recently made statements about the necessity for judging performance on the long term – that is, over 5 or 10 years.