Revlon Slashes 400 Jobs; Stock Plummets

Revlon announces a plan to eliminate 400 jobs in an effort to cut costs.
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Revlon

(REV) - Get Report

was made up in red on Thursday, as the cosmetic company announced a plan to slash 400 jobs, and the market responded by slashing its stock price.

The elimination of 325 current positions and 75 open jobs is expected to result in savings of $30 million a year.

Revlon will incur $20 million in restructuring charges, including severance and other termination benefits, and $3 million for the consolidation of office facilities in New Jersey. About $17 million in charges will be recorded in the second quarter, with $3 million recognized in the second half of 2009.

Shares of the company tumbled 14.5% in morning trading to $5.07, as Revlon also announced that its second-quarter outlook is "significantly below" last year's results, due to currency fluctuations, pension expenses and slowing growth in mass color cosmetics.

The news comes a day after an analyst raised her price target on a management shuffle and better-than-expected first-quarter earnings, sending shares up more than 10%.

For its first quarter, the company had

posted a surprise profit

of $12.7 million, or 25 cents a share, compared with a net loss of $2.5 million, or 5 cents, in the year-ago quarter.

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