Avon to Cut 10% of Global Workforce in Bid to Further Trim Costs
(Bloomberg) -- Avon Products Inc. will cut 10 percent of its global headcount as it looks for new ways to save money and simplify its structure. Most of the job cuts will take place this year, saving the makeup company about $97 million by the end of 2019.
- These aren’t Avon’s first round of recent layoffs. The staffing cuts come on top of the 8 percent global workforce reduction completed in 2018. It said it will also cut its inventory levels by 15 percent, resulting in a one-time $88 million charge.
- The London-based company is facing new challenges in a competitive beauty space. Trendy startups -- ranging from venture capital-backed American brands to Korean beauty companies expanding globally -- have eaten away at market share held by industry incumbents.
- L’Oreal SA and Estee Lauder Cos., the world’s two largest beauty businesses, have been able to acquire hot brands and use them to attract new young customers. Avon hasn’t been as successful on that front. Shoppers have also flocked to specialty retail stores as chains Ulta Beauty Inc. and Sephora open new locations across the U.S.
- Avon shares rose as much as 3.2 percent in late trading in New York. The stock has jumped 24 percent this year.
- Read the full company statement here.
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