Avon Products To Cut 2,500 Jobs, Move Headquarters To U.K.; Stock Up

(RTTNews) - Avon Products Inc. (AVP) said that it will reduce its headcount by approximately 2,500 positions across multiple geographies. It includes both filled and open positions.

The company will reduce corporate infrastructure and will transition, over time, the location of Avon's corporate headquarters to the United Kingdom, where the Company has significant commercial operations.

AVP closed Monday trading at $4.38, up $0.18 or 4.29%. In the after-hours, the stock further gained $0.07 or 1.60%.

The company expects to record total charges associated with these actions of approximately $60 million before taxes in the first quarter of 2016. These charges are expected to be comprised primarily of employee-related costs.

The company expects to realize pre-tax savings of approximately $30 million in 2016 associated with an approximate 1,700 headcount reduction, and expects to achieve annualized pre-tax savings of approximately $65 million - $70 million beginning in 2017.

In addition, the company expects to realize annualized pre-tax savings of approximately $20 million in 2016 related to the elimination of the open positions. Avon will maintain its current facilities in Suffern, NY and Rye, NY. The Company will also continue to be incorporated in New York and trade on the New York Stock Exchange under the symbol AVP.

As announced previously, Avon separated its North American business into a privately-held Company in which Avon maintains a minority interest. The North American business is not impacted by any of today's actions.

In response to the announcement by Avon Products that it is reducing headcount and moving its headquarters from New York to the United Kingdom, James Mitarotonda, the Chairman and CEO of Barington Capital Group, L.P. Said, "We are pleased that Avon is following our recommendation to reduce excess costs and corporate overhead. We believe that there is still much more that needs to be done to improve the business as outlined in our December 3 letter. We also continue to believe that Avon needs to add new independent directors that can help improve long-term value and ensure that shareholder interests are protected."