Jan. 8 (Bloomberg) -- Avon Products Inc., the world's largest door-to-door cosmetics seller, will cut an additional 2,400 jobs as part of a restructuring plan that will lead to savings of $430 million annually.

The maker of Anew anti-wrinkle cream said today in a statement that it expects $130 million, or 43 percent, more in reductions by 2012 after completing the plan announced in November 2005. The program will cost an additional $30 million.

Avon planned to use savings from job cuts and plant closings to increase advertising by 50 percent last year and add incentives for sales representatives. The cosmetics company is expanding overseas to counter slowing U.S. growth, where it faces competition from sales of Procter & Gamble Co.'s Cover Girl and Revlon Inc.

``It shows savings are on track, and there's further savings ahead at lower costs,'' said Mariann Montagne, who helps manage $70 billion, including Avon shares, at Thrivent Asset Management in Minneapolis. ``They're successfully growing in emerging markets. Their investments in the U.S., U.K., Mexico and other developed nations look to be paying off.''

The moves will save it $430 million annually by 2012, compared with an earlier projection of $300 million, New York- based Avon said.

A separate plan to sell fewer, more profitable products will save more than $200 million by the end of next year, said Avon, which also makes Skin-So-Soft lotions.

Avon, the seller of makeup in more than 100 countries through 5 million representatives, fell 4 cents to $38.51 as of 4 p.m. in New York Stock Exchange composite trading. The stock climbed 20 percent in 2007.

Restructuring Costs

Restructuring costs will reach $530 million, $30 million more than the company anticipated.

The reduction of an additional 2,400 jobs stems from sales and distribution changes. Avon had 40,300 employees at the end of 2006, down 6.3 percent from 43,000 in 2005, according to its annual reports.

Avon spokeswoman Sharon Samuel declined to give a 2007 figure or provide a total number of jobs cut since the restructuring started in November 2005.

The number of employees excludes sales representatives.

Fourth-quarter earnings will be reduced by $120 million for fixing operations in Germany and other overseas locations, moving call centers and transaction processing to outside firms, and changing distribution in Western Europe and Latin America.

A Needed `Streamline'

``They needed to streamline,'' Montagne said. ``They're aligning manufacturing and distribution with the growth areas.''

The strategy to reduce product lines will cost $110 million in the fourth quarter, mostly to write off inventory.

Avon plans to invest $160 million during the next three to four years to reorganize its manufacturing and distribution facilities in Western Europe and Latin America.

The cosmetics maker wants to build a new distribution center by 2010 in Brazil, where third-quarter revenue surged more than 30 percent from a year earlier, and close its current site in Sao Paulo by 2011. A Guatemalan manufacturing plant will close later this year.

To contact the reporter on this story: Heather Burke in New York at hburke2@bloomberg.net.

Last Updated: January 8, 2008 17:21 EST