Avon announces a further 900 job cuts
announced that a further 900 jobs are to go, in addition to the
1,300 jobs it axed at the end of April.
In a filing made through the US Securities and Exchange Commission, the company said that its board of directors has approved the termination of 'certain employees as part of the company's ongoing process to take layers out of the organization'.
Although the filing did not specify where the latest round of job cuts would be taking place, the company has already said that it is looking to make significant cut backs in its management in an effort to bring the company's decision making process closer to its customer base and direct sales staff.
The company has said that it expects it will record total charges, mostly as future cash expenditures, of approximately $25 - 30 m before taxes for cost relating to the termination of the 900 employee contracts.
When the company announced the termination of the 1,300 jobs at the end of April, it said it expected to incur costs of $73m directly related to the termination of the contracts, suggesting that that round of cuts was more geared towards higher paid management posts.
Avon currently has 48,000 full-time employees, of which approximately 20 per cent are employed in the United States, with the remaining employed throughout the world.
The company added that it was expecting to make further announcements relating to exit and disposal costs throughout the course of the coming year.
In February of this year Avon announced a big drop in its fourth quarter profits following the closure of its Indonesian manufacturing operations and the associated costs.
That closure cost the company $22m and led to a 36.7 per cent drop in profits, which stood at $183m. And with more cuts to come, the company is poised for a difficult year.
The announcements serve as part of a $500m restructuring project aimed at reigniting the company's sliding profitability. In recent years it has experienced difficult market conditions in its core North American market, brought about primarily by intensive competition.
The $500m price tag for the restructuring is at the upper end of the $300 - 500m estimate originally given back in November, when the restructuring program was first announced.
However, the restructuring has been well received by industry expert and financial analysts, who believe that the program should leave the company in far better shape.
