Avon Products moving to the UK, shedding 2500 jobs – USA TODAY

7 months ago Comments Off on Avon Products moving to the UK, shedding 2500 jobs – USA TODAY

Avon Products, the maker of women’s cosmetics and beauty products, said Monday that it is moving its operational headquarters from New York to the United Kingdom and will shed 2,500 jobs.

The move is not considered a tax inversion and that the company will still be traded on the New York Stock Exchange, said a spokeswoman, Radina Russell.

Avon (AVP) said in its statement that the primary motivation is that it has “core enterprise functions” in the U.K. with “direct connections to operations throughout the world.”

The announcement comes two weeks after 130-year-old Avon completed the spin off of its troubled North American business into a privately held company under the control of a private equity firm, Cerberus Capital Management. Avon still has a 20% stake in the private New Avon LLC.

“With the recent completion of the sale of the North American business, our commercial operations are now fully outside the United States, allowing us to dramatically rethink our operational model,” said CEO Sheri McCoy in a statement.

Avon Products, which has operations in 70 countries with Brazil as its largest single market, said that it will “reduce corporate infrastructure” as it makes the transition to the U.K. It said, however, that it will maintain its facilities in Suffern and Rye, N.Y.

The company will take charges related to the move of $60 million in the first quarter, mostly due to employee costs. It says the job reductions will include both filled and unfilled positions. It will lower its headcount by 1,700, resulting in annual pre-tax savings of $65 million to $70 million starting in 2017. Avon estimates it will save about another $20 million by leaving unfilled jobs open.

Avon shares closed Monday at $4.38 a share, up 18 cents or 4.29%.

Avon Products moving to the UK, shedding 2500 jobs – USA TODAY

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