Avon Products Inc. said Monday it will fire 1,300 workers by the end of the year and record $70 million in charges in the first quarter in connection with its previously announced restructuring.
In a filing Monday with the Securities and Exchange Commission, the New York-based direct seller of beauty products said that a board committee board approved Friday terminating the positions of more than 1,300 workers to remove layers from the organization, as well as initiatives to exit certain unprofitable operations.
According to its annual report, Avon employed 49,000 full-time employees as of Dec. 31, of which 8,700 were employed in the United States and 40,300 in other countries.
In February, Avon said that it expected the cost of implementing its multi-year restructuring plan to be about $500 million, which is at the high end of the $300 million to $500 million range it estimated last November. The implementation of its plan would continue over the next three years. There will also be additional charges in the first quarter relating to restructuring.
Avon said each of these initiatives is expected to be completed in 2006 and is a part of the previously announced multi-year restructuring effort.
The company expects to record total charges of about $95 million to $100 million before taxes in connection with these initiatives, including $73 million of employee-related costs, $8 million of asset impairment costs, $13 million of contract termination costs and $1 million of other costs.
Avon said about 85 percent to 90 percent of the total charges associated with these initiatives are expected to result in future cash expenditures.
