Up to half of the employees at Le Locle manufacture could lose their jobs as the brand cuts models and production in restructuring after years of financial losses.

Z enith, the storied Swiss brand founded more than a century ago and known for its El Primero high-beat chronograph movement, will undergo major restructuring, forcing the LVMH-owned company to significantly reduce its workforce and scale back production and distribution, with plans to reposition the marque as a high-horology, low-volume watchmaker.

The Zenith overhaul follows years of financial losses by the brand, founded by Georges Favre-Jacot in Le Locle, Switzerland, in 1865. Chief Executive Officer Benoit De Clerck addressed employees at the company's headquarters this week, announcing the restructuring and warning that the company could eliminate as many as 100 jobs, or about half the workforce at the manufacture.…