Avon to cut jobs, exit two markets as part of cost-savings plan
NEW YORK — Avon, a direct seller of beauty products, has outlined initial steps toward its previously announced cost-savings initiative, which includes the reduction of about 1,500 global jobs.
The company also announced that it will exit the South Korea and Vietnam markets. These actions are aimed at concentrating resources on high-priority markets and activities and boosting efficiencies, and are expected to be largely completed before the end of 2013, the company stated.
The moves mark the initial steps of its annual cost-savings target of $400 million by the end of 2015.
Cost to implement these actions is expected to be in the range of $80 million to $90 million before taxes, of which approximately $50 million to $60 million is expected to be recorded in the fourth quarter of 2012. The company anticipates that these initial steps will account for approximately 20% of the total targeted savings.
"In order to turn around the business, we are focused on driving top-line growth and aggressively managing our cost base," stated Sheri McCoy, CEO of Avon. "The decisions outlined today are necessary to stabilize the company and begin the process of returning Avon to sustainable growth."
The company stated that it expects to announce additional steps toward the cost-savings goal as it progresses.