US cosmetics group Avon Products, the sector’s biggest door-to-door sales operation worldwide, is to cut a further 650 jobs as part of its plan to reduce costs by US$400m by 2016.
The latest job losses, which follow an earlier 1,900 lay-offs, are accompanied by a decision by Avon’s chief executive (CEO), Sheri McCoy, to halt the roll-out of new software technology that aimed to improve communication between the company and its sales force.
The technology initiative, which was launched by McCoy’s predecessor, Andrea Jung, includes an updated order-management system. However, the initiative caused “significant business disruption” when it was launched in Canada. Avon said in a statement that it would have a pretax charge of up to US$100m-$125m in the fourth quarter to write down the value of some software, which will no longer be put to use in the rest of the world.
Avon had intended to roll-out the system to other markets including Brazil, the US, Mexico, the UK and Russia over the next four years, according to a recent job posting. Avon will keep the software system in Canada. The company remains committed to upgrading aging technology infrastructure, a spokeswoman said.
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However, a London summit on the industry’s introduction of the technology cautions that testing and acceptance are still at an early stage and firms should proceed with caution.
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