Avon to Cut 1,500 Jobs; Exit South Korea, Vietnam
Avon Products Inc. (AVP), the world’s largest door-to-door cosmetics seller, will cut about 1,500 jobs globally and exit South Korea and Vietnam as part of plan to save $400 million by the end of 2015.
The steps will result in pretax costs of about $80 million to $90 million, with $50 million to $60 million recorded in the fourth quarter, the New York-based company said yesterday in a statement.
Chief Executive Officer Sheri McCoy, who took over in April, announced the cost-cutting goal last month and said she would lower the company’s dividend as it works to recover from three years of declining profit. The actions announced yesterday will be completed by the end of next year and account for about 20 percent of Avon’s savings target.
“The new management team is making definitive changes to the company’s cost structure,” Connie Maneaty, an analyst at Bank of Montreal (BMO) in New York, wrote in a note today. She rates the shares outperform, the equivalent of a buy.
Avon fell 1 percent to $14.33 at the close in New York. The shares have declined 18 percent this year.
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