Avon Products To Cut 10% Of Global Workforce

(RTTNews) - Avon Products Inc. (AVP) Wednesday announced its decision to lay off 10% of its global work force in order to "improve its operational efficiency."

The company said the global workforce reduction by about 10% will create a leaner organization that is better aligned with Avon's current and future business focus.

The lay offs are are expected to be substantially completed by the end of 2019. The latest round of lay offs are on top of an 8% reduction of the global workforce completed in 2018.

CEO Jan Zijderveld said, "Decisions like these are always difficult, however, we must take the actions necessary to improve our operations and strengthen our ability to continue investing in our transformation initiatives and fuel our future growth."

The company expects to achieve annualized pre-tax savings of about $97 million by the end of 2019. The company will also record charges related to these actions of about $100 million before taxes incremental to the around $51 million in charges associated with Open Up Avon that had been approved to date.

Avon also said its taking a one-time inventory obsolescence expense of around $88 million, as a result of its SKU reduction efforts, which will advance the simplification of Avon's operations, drive cost savings through lower raw material and procurement cost.