Avon to cut 2,400 jobs around the world
Avon Products Inc. on Tuesday said it will cut 2,400 jobs as part of its multiyear restructuring plan, which will cost more than originally expected and ultimately save the beauty-products maker $430 million annually.
Avon unveiled its restructuring program in November 2005. It involved steep job cuts, the elimination of management layers and the realignment of manufacturing centers and outsourcing work to countries with lower labor costs.
The company, which sells beauty products directly to customers, operates in 100 countries through more than 5 million independent sales representatives. Its products include Skin-So-Soft, Avon Color and Anew.
The restructuring plan will cost $530 million, up from a previous estimate of $500 million, of which $460 million will have been taken through the fourth quarter of 2007. The remainder will be recognized by the end of 2009.
In the fourth quarter, the company will take a charge of $120 million for restructuring some international direct selling operations, realigning supply-chain operations in Western Europe and Latin America, outsourcing call centers and other initiatives.
About 4,000 jobs globally will be cut by the restructuring, but new jobs will be created, resulting in a net reduction of 2,400 jobs.
AT&T Inc.‘s shares tumbled Tuesday after Chairman and Chief Executive Randall Stephenson said the telecommunications carrier is experiencing slowdown in its broadband and traditional wire phone sales to consumers.
Speaking at Citigroup Inc.’s Entertainment, Media and Telecom Conference in Phoenix, Stephenson said the bulk of the weakness is coming from service disconnections due to nonpayment on those lines.
AT&T’s shares fell $1.87, or 4.6 percent, to close at $39.16, bouncing off an initial dive that sent the stock down 9.5 percent.
McGraw-Hill Cos., a major educational publisher that also owns the Standard & Poor’s credit ratings agency and BusinessWeek magazine, said Tuesday it is cutting more than 600 jobs, resulting in a fourth-quarter charge of $43.7 million.
The 611 job cuts will be made across the company’s divisions and will reduce its after-tax earnings by 8 cents a share, the company said in a statement. About half of the job cuts will be made in its education division.
McGraw-Hill attributed the cuts in its financial services division to current business conditions, which were affecting both the credit ratings services and other businesses of Standard & Poor’s.