New York based, direct marketing beauty product company, Avon, is all geared up to minimize operations in two Asian markets, namely, Vietnam and South Korea. The new CEO, Sheri McCoy has decided to slash 1,500 jobs which amounts to cutting down 3.7% of the total workforce of the company, reported USA Today.
"The decisions outlined today are necessary to stabilize the company and begin the process of returning Avon to sustainable growth," McCoy said in a statement.
Around 100 jobs will be severed in Vietnam and the company will cease to operate in South Korea, reported Columbia Tribune.
The job cuts are directed at restructuring the complete management team in order to achieve an annual savings of $400 million by the end of 2015, reported Wall Street Journal. Avon has a global workforce of 40,600 employees.
Avon's sales revenues in Vietnam and South Korea have been comparatively unprofitable, which led the company to uproot itself from the two regions, stated Wall street Journal.
The planned cuts are expected to happen before the end of 2013, which will cost the company a whopping $80- $90 million. Around $60 million of the total cost will be recorded to account for the current quarter. Most of the cuts will be worker related, reported WSJ.
"These are minuscule businesses but underline Avon's inability to develop Asia successfully," Ali Dibadj, analyst at Sanford Bernstein told WSJ.
"The company should look at making bigger divestitures that matter." he added.
Avon saw an 81 percent slump in its net income in November.
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