Investing.com -- Avon Products Inc (NYSE:AVP) announced the elimination of a total of 2,500 filled and open positions on Monday, as part of three-year transitional plan that was announced at the company's Investor Day earlier last month.
Avon Products, the fifth-largest beauty company and second-largest direct selling enterprise in the world, cited the need to revise its commercial business operations in order to ensure that all of its markets have "have consistent roles, responsibilities and processes," in announcing the plan. In addition, Avon expects to eventually move the company's headquarters to the U.K. where it has significant business operations. As such, the company expects to move some of its core enterprise functions to the U.K. before the headquarters relocate overseas to improve connectivity with its other locations throughout the world.
"Today, we are taking another important step forward in the execution of Avon's transformation plan. With the recent completion of the sale of the North American business, our commercial operations are now fully outside of the United States, allowing us to dramatically rethink our operating model," said Sheri McCoy, Chief Executive Officer, Avon Products.
"The actions we are taking today will bring our corporate and commercial businesses closer together, which will drive efficiencies, improve operational effectiveness and deliver significant cost savings."
Avon anticipates recording charges of approximately $60 million over the first quarter of 2016 to accommodate the changes. For the year, as a whole the company expects to realize pre-tax saving of roughly $30 million with the elimination of 1,700 positions. Starting in 2017, the company plans on achieving anywhere between $65 and $70 million in savings from the initiative.
Shares in Avon Products inched up 0.07 or 1.60% to 4.45 in after-hours trading.