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Avon Products Inc.’s share price down, intends to cut 600 jobs as CEO McCoy is trying to trim expenses

The biggest door-to-door cosmetic seller in the world – Avon Products Inc. – made an official statement, revealing that it intends to cut 600 jobs. The announcement comes at a time when Ms. Sheri McCoy, who is the current Chief Executive Officer of the company is trying to reduce expenses in order to turn Avon Products Inc. back to profit.

The step is part of a multi-year restructuring program estimated at about 400 million dollars. According to the companys statement, most of the job cuts are planned to be from the corporate organisation and the companys unit located in North America. According to Avons latest annual filing, the company had 36 700 employees, including 4 300 in the U.S. at the end of December 2013. It plans to cut more than 1 000 jobs.

The lay-offs are considered able to help the company save between 50 to 55 million dollars a year before taxes. Avon Products Inc. also shared its expectations of hitting annual pretax cost savings that amount from 240 to 250 million dollars.

Recently, the company has been dealing with deep dissatisfaction from its shareholders, while it has been struggling to turn the company back to profit. The reorganization program also comes at a time when Avon Products Inc. has been dealing with a federal probe related to allegations of bribery of officials outside the U.S.

Over the past six financial quarters, the door-to-door seller of make-up posted five quarterly losses, which is one of the main reasons why the company is so desperately trying to turn back to profit. Over the first quarter that ended March 31st, the net loss of Avon Products Inc. increased from 13.7 million dollars, or 3 cents per share posted a year ago to 168.4 million dollars, or 38 cents per share.

Avon Products Inc. was 1.67% down to close at 14.69 dollars per share yesterday, marking a one-year change of -29.38%. According to the information published on CNN Money, the 14 analysts offering 12-month price forecasts for Avon Products Inc. have a median target of 15.00, with a high estimate of 25.00 and a low estimate of 12.00. The median estimate represents a +2.11% increase from the last price of 14.69.

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