Avon Products Inc. (AVP) said it will cut 2,300 jobs worldwide,
or some 5% of its work force, as the direct seller of cosmetics
restructures to boost sagging profit.
The company announced its latest round of streamlining in
February and gave details Wednesday. Avon said when the plan is
fully implemented, the net reduction in its work force will be
about 1,200 positions.
Chief Financial Officer Charles Cramb said the latest moves
reflect almost half the costs of the restructuring plan, which
started in 2005, and are expected to generate approximately 60% of
the targeted annualized savings of $200 million by 2012-2013.
Costs from the restructuring plan will lower second-quarter
earnings by 19 cents a share. Analysts surveyed by Thomson Reuters
were expecting second-quarter earnings, excluding items, of 35
cents.
The beauty products industry has been hard-hit by a continued
curbing of consumer spending. Avon has been cutting costs as part
of a years-long restructuring, while also trying to appeal to more
budget-conscious consumers. It is also boosting its recruiting
efforts, with the hopes of attracting some women who may be out of
work to its sales force.
In May, it posted a 36% drop in first-quarter profit as sales
continued to decline because of the stronger dollar, while sales
volumes were flat. Second-quarter results are due July 30.
Avon shares closed Tuesday at $28.82 and were inactive
premarket. The stock is up 20% this year.
-By Mike Barris, Dow Jones Newswires; 212-416-2330;
mike.barris@dowjones.com;