Beauty Industry

Global Initiative Still Underway at Avon

Company plans to cut 1,200 jobs by 2012.

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By: Jamie Matusow

Editor-in-Chief

Sometimes you have to act local to think global—as seen at Avon. Part of the company’s massive restructuring plan, its most recent initiatives include “realignments in its global supply chain manufacturing footprint and improvements in operating model effectiveness in key geographies,” according to the company.

As a result, Avon said that approximately 2,300 positions will be impacted globally, with a net reduction of approximately 1,200 positions when the initiatives are fully implemented by 2012-2013.

Avon also said that the second-quarter 2009 charge will include costs-to-implement realignments of supply chain manufacturing operations, primarily in North America, Western Europe and Central and Eastern Europe.

In North America, the company plans to shutter its facility in Springdale, Ohio by mid-2012—shifting production to its manufacturing sites in Morton Grove, IL, and Celaya, Mexico, as well as to contract manufacturers. In line with this, the Springdale-based return goods operation will also close, with the function being relocated to another Avon U.S. facility or outsourced in the U.S. The existing customer service call center will continue to operate and will relocate in Springdale or the greater Cincinnati, Ohio vicinity.

In Western Europe, Avon said that it is planning to close its manufacturing facility in Neufahrn, Germany and that it has entered into the required formal information and consultation processes with the economic committee and works council in Germany. The company said that it expects to phase-out operations by mid-2011 and plans to transfer production volume to other Avon manufacturing facilities, including Garwolin, Poland and to contract manufacturers.

In Russia, the company said that it is planning to improve processes, reconfigure equipment and streamline operations at its facility in Naro Forminsk in order to meet increasing demand more cost-effectively.

Also included in the second-quarter 2009 charge are costs to continue improving Avon’s operating model effectiveness in Latin America and Western Europe.

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