Market Overview

Avon Reduces Global Headcount Following IT Outsourcing To Hewlett Packard, Expects Annual Savings Of $10-$15 Million Beginning In 2019

Share:

Avon Products, Inc. (NYSE: AVP) on Thursday announced it has entered into an agreement with Hewlett Packard Enterprise Co (NYSE: HPE) to transform key elements of Avon's IT infrastructure.

As Part of the agreement, Hewlett Packard Enterprise will provide a "high-quality service delivery using best practices and alignment to established global standards," among others.

Hewlett Packard Enterprises will also identify cost efficiencies and provide tools and process to help Avon operate more consistently.

"As a leader in beauty and direct selling, Avon aims to stay ahead of the curve by laying a new foundation for their digital strategy," said Mike Nefkens, Executive Vice President & General Manager of Enterprise Services, Hewlett Packard Enterprise. "The partnership with Hewlett Packard Enterprise will enable Avon's business transformation journey, which is critical for staying competitive in today's rapidly dynamic business environment."

Separately, Avon disclosed in an 8-K filing that it will reduce its global headcount as part of the IT infrastructure outsoursing initiative. The company expects to record total charges of $30 million before taxes, $20 million of which are expected to be recorded in the fourth quarter of 2015.

Avon added that it expects to begin realizing savings in 2018 and will begin to see an annualized pre-tax savings of $10 million to $15 million per year beginning in 2019.

Shares of Avon have lost nearly 70 percent over the past year.

Posted-In: Avon Avon Products Hewlett Packard Enterprises IT Infrastructure Mike NefkensNews

 

Related Articles (AVP + HPE)

View Comments and Join the Discussion!

Benzinga's Top Initiations

DowDuPont Alert: Bernstein Upgrades, Says 'Too Much Upside' To Ignore