Avon to eliminate about 1,200 positions by 2013
NEW YORK — Avon Products Inc. said Wednesday that it will eliminate about 1,200 positions, or about 2.8 percent of its oevrall work force, by 2013 as part of restructuring efforts amid a recession that has dampened demand for the company’s cosmetics.
The revamp will affect about 2,300 positions worldwide, which includes job openings as the company restructures its operations, according to spokeswoman Sharon Samuel.
“Jobs will be created even as others are eliminated,” she said.
Avon shares lost 15 cents to close at $28.67 Wednesday.
The revamp will result in a second-quarter charge of approximately $90 million, or 19 cents per share, including a one-time restructuring tax charge of 5 cents per share and costs from a previous restructuring.
The second-quarter charge includes costs to realign supply chain manufacturing operations, mostly in North America and parts of Europe.
“When fully implemented, the initiatives approved to date reflect almost half the costs to implement the 2009 restructuring program, and are expected to generate approximately 60 percent of the targeted annualized savings,” said Charles Cramb, vice chairman, chief finance and strategy officer.
New York-based Avon Products Inc. said the restructuring program, which was announced in February, will help trim costs and make it a more efficient company. It anticipates about $200 million in total annualized saving by 2012 to 2013.
Avon, facing weak sales and soft consumer spending, recently doubled its investment in recruitment advertising to boost the number of representatives who sell its products. At the end of the first quarter, Avon had at least 9 million sales representatives.
Avon is scheduled to release second-quarter results on July 30.
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