Avon ( AVP) will cut 620 jobs in closing two U.S. distribution plants.

The New York-based cosmetics giant said it also plans to build a new Midwest distribution plant that will employ 500 people starting in 2009.

Avon said it will spend $150 million building the new plant and upgrading technology. The company plans to upgrade and modernize its Atlanta-based distribution center and is evaluating options for investing in a new warehouse management system for its Pasadena, Calif., site.

It will take $20 million in fourth-quarter severance costs tied to closing the Newark, Del., and Glenview, Ill., plants, and $65 million over coming years on depreciation and other expenses.

Avon said it continues to project that the total cost to implement all of its restructuring initiatives will be in the range of $500 million and that the annualized restructuring savings will exceed $300 million when the plan is fully realized.