Following a loss of $167 million in the first quarter of 2014, Avon is, unsurprisingly, doing some restructuring.
The door-to-door seller of beauty products announced Monday that it plans to lay off another 600 of its employees as part of its overall turnaround efforts. (It laid off 650 in December.) The newly eliminated positions will primarily be in the corporate organization and North America business unit, the company said. The cutbacks are expected to save Avon $50 million to $55 million before taxes, per year. The company hopes to save $400 million by 2016.
While Avon has been facing declining sales for a while now, it's far from dead. Six hundred people make up less than two percent of Avon's 36,700 employees (not including sales reps), and the company that prides itself on helping women become financially self-sufficient still boasts more than 6 million representatives (or "Avon ladies") around the world. That said, international expansion has been part of the problem. Certain markets have been underperforming, while Avon recently had to pay $135 million in response to allegations that it had paid bribes in China and other countries to gain a foothold.
Avon is one of the oldest stalwarts of the beauty industry, and given the rapid growth of Sephora and newer beauty startups, it's quite impressive that Avon is still alive and kicking -- not to mention a testament to the strength of the brand. But given such competition, it will be interesting to see how (and if) this turnaround pans out.