Avon Products Inc. is getting to work on trying to fix its business.
Less than a month after its decision to spin off its North American business, the direct seller said on Thursday that it plans to lay off employees.
The company said the headcount reductions are primarily related to its technology infrastructure outsourcing initiatives, and that the actions are expected to largely be completed by Dec. 31, 2016. The company expects to record total charges related to the layoffs of approximately $30 million before taxes, and to record about $20 million of those charges in the fourth quarter of 2015.
The company expects to record a balance of the charges by Dec. 31, 2016.
To help it surmount its challenges, Avon in mid-December signed a $605 million deal with Cerberus Capital Management to recast its North American business as a privately-held company. Under the terms of the deal, which is expected to close this spring, Avon will retain approximately a 20 percent stake in the North American business.
Following the layoffs, Avon said the company expects to realize savings from actions to reduce headcount in 2018, and expects to achieve annualized pre-tax savings of approximately $10 million to $15 million beginning in 2019.