PROVO — A raft of job cuts at Nu Skin Enterprises is over and the layoffs have nothing to do with a rumored takeover bid by Avon Products, company officials told employees Thursday.
Nu Skin has slashed 176 jobs over the past five weeks, Nu Skin President Truman Hunt said. Another 50 jobs have been closed through attrition since the beginning of the year for a total reduction of 15 percent of the company's Provo work force.
Hunt said during a companywide meeting at the Provo Tabernacle that the cutting is over and the business is healthy.
"I know you're all breathing easier," he told most of the remaining 1,236 Provo employees, who applauded Hunt and company founder Blake Roney and enjoyed a barbecue lunch and a cultural dance by Polynesian football players from Brigham Young University.
The job cuts and other belt-tightening will help Nu Skin save $20 million this year, Hunt said. The 2005 net income for Nu Skin and its other brands, Pharmanex and Big Planet, was $74 million on record revenues of $1.18 billion.
"We're doing well, but we must do better, and we can," Hunt said. "We have the financial resources, the technical capacity, the field resources and the employees to do it."
Some wondered if the moves were designed to make Nu Skin more attractive for a prospective corporate takeover partner like Avon, but Hunt said they are part of a business transformation designed to increase the company's efficiency and position it to seek its goal of becoming the world's leading direct-selling company.
The decision to reorganize was made after company leaders around the world participated in a technical analysis of the company and business trends.
Roney said the cuts were painful but necessary.
"We grow, the world changes and what we've been doing doesn't make sense anymore," he said.
Executives described severance packages as generous and spokeswoman Kara Schneck said Nu Skin offered a placement service that has helped many former employees find new jobs.
"One of the great assets we have is our employees," Schneck said. "They are very talented, well-skilled people, and that includes those who have now left our company."
Last week, CNBC reported that Avon Products is interested in acquiring Nu Skin, a publicly held company. Nu Skin's leadership does not comment on rumors, but Hunt said the reorganization had nothing to do with the rumor — and Roney poked fun at it.
"Truman doesn't want me to tell you this," Roney said. "We have sold to Burger King. Don't tell anyone."
Nu Skin is 75 percent owned by public stockholders.
"If Avon wanted to buy us," Hunt said, "it probably could. It could make an offer for 75 percent of the stock and we'd be held by Avon."
Hunt told employees the rumor shouldn't be a source of undue concern but that they should be prepared for upcoming training on the company's new initiatives. They will be encouraged to break habits and to seek innovative new ways to do their jobs.
Nu Skin plans to begin selling in Russia this month and is applying for a license to move efforts in China beyond a retail model into direct sales.
Revenue in the final quarter of 2005 was down 5 percent, primarily because of the weakness of the yen, but net income exceeded $15 million. Nu Skin does much of its business in Japan.
E-mail: twalch@desnews.com