Global beauty care products maker Revlon Inc will cut 400 jobs worldwide as a part of its restructuring plan to reduce cost by about $30 million, amid the uncertain economic environment.
"The organisational restructuring will result in the elimination of approximately 400 positions worldwide, including approximately 325 current employees and about 75 open positions," a Revlon statement said.
The company's restructuring programme involves rightsizing to reflect the more efficient work flows and processes Revlon has implemented over the last two years.
Besides, given the ongoing uncertain economic environment and potential effect it could have on Revlon's net sales, the action would provide it with additional flexibility, the statement added.
"Today's announcement represents an important, necessary, and logical next step forward for Revlon. Over the past two years, we have built improved and more efficient processes and work flows, which now allow us to take this step to reduce annualized costs by approximately $30 million," Revlon President and Chief Executive Officer Alan T Ennis said.
This action, which the company is implementing immediately, would enable it to become a stronger and more financially sound while staying true to the vision of providing glamour and innovation to consumers through high-quality products at affordable prices, Ennis added.
The primary components of the organisational restructuring would involve consolidating certain functions, reducing layers of management and increasing accountability and effectiveness.
Further, the process would also streamline support functions to reflect the new organisational structure and consolidate the company's office facilities in New Jersey.
The annualised cost reductions from this organisational restructuring are expected to be about $30 million, of which around $15 million would benefit 2009 results, the statement added. Restructuring and related charges are expected to be $20 million comprising $17 million of employee-related costs, including severance and other termination benefits, and $3 million related to the consolidation of the company's office facilities in New Jersey.
In an outlook for the second quarter of 2009, the company said, while the mass color cosmetics category in the US continues to grow, the rate of growth has started to slow and retailers are carefully examining and optimising inventory levels.
"As a result of these factors, combined with unfavorable impact of foreign currency fluctuations and pension expense, not including charges related to our organisational restructuring actions, we anticipate significant negative impact on net sales and profitability in our second quarter 2009 results as compared to the second quarter 2008," Ennis said.
