Avon to cut 400 jobs, exit Irish market
09 April 2013
Avon Products, Inc yesterday said that it will cut 400 jobs and close its Irish market, as part of the beauty products company's earlier announced cost saving plan.
Sheri McCoy, the newly appointed CEO of the New York-based company, had in December 2012 said that Avon would exit underperforming markets and cut 1,500 jobs worldwide in order to bring in savings of $400 million by 2016.
The job cuts, which are about 1 per cent of Avon's 39,100 workforce, would take place across all regions and segments. It is expected to generate $45 million to $50 million in annual saving.
Avon, which sells its products to women in more than 100 countries, will take charges of around $35 million to $40 million before taxes and expects to complete almost all the job cuts before year's end.
As part of the restructuring, Avon will close certain smaller, underperforming markets, primarily in Europe, Middle East & Africa, including exiting from Ireland.
"We continue to work aggressively toward turning around the business," said McCoy, a former vice chairman at Johnson & Johnson. "The steps outlined today take us closer to our cost-savings goal. At the same time, we remain focused on continuing to streamline the business and driving top-line growth.''
Avon's longtime CEO Andrea Jung stepped down in 2012, a year that saw the company losing about 30 per cent of its value due to declining sales and an ongoing investigation into allegations of bribery by its executives in China.
In December, Avon had said that it would exit from South Korea and Vietnam and a month later closed its Pasadena and Atlanta distribution facilities.
McCoy plans to continue to cut costs as she works to bring in more sales in countries like Brazil, Russia and China.