L’Oreal cuts 500 jobs in US
The France-based cosmetics giant will be losing nearly 5 percent of its US workforce within the next 6 months according to press reports.
Reduced sales forecast
Recessionary clouds are beginning to take their toll on the company, reflected recently in the publication of reduced sales and profit forecasts for the financial year.
L’Oréal had estimated in August that like-for-like growth, which excludes acquisitions and currency fluctuations, would be nearly 6 per cent for the fiscal year.
However, a sluggish third quarter, when sales increases failed to match expectations, led the company to reduce its guidance figures to 4 percent.
Although the company stated this particular round of job losses won’t affect other markets, its European operations have already felt the consequences of gloomy economic times.
Factory closures across Europe
The company recently announced the closure of a factory in Wales, along with the imminent shut down of a factory in Monaco.
Operations at Talbot Green in Wales had become untenable due to high logistical costs, according to the company. As more than two thirds of production from the factory is exported and over 70 percent of materials imported, the company said the cost of operations was no longer acceptable.
Likewise, the plant in Monaco will be closed from March 2011 as production at the site is no longer viable.
According to the company, the site posed logistical problems that couldn’t be overcome and the facility couldn’t be improved to comply with the tight regulations in the region, whilst retaining its competitive edge.
Manufacturing of the Biotherm and Helena Rubenstein brands that are currently undertaken at the plant will be relocated to the company’s industrial facility in Sicos de Caudry, Northern France.
The research and development laboratories will be transferred to the company’s laboratories in Chevilly-la-Rue, near Paris.