Brown-Forman to cut 12% of global workforce as part of restructuring

(Reuters) – Brown-Forman said on Tuesday that the Jack Daniels maker will lay off 5,400 workers, or 12% of its global workforce, as it cuts costs amid weak alcohol demand.

The company has struggled with higher input costs, including raw materials such as agave and wooden barrels, and increased prices for its whiskey brands.

Confronting the high cost of living, consumers have traded in cheaper brands. Brown-Forman peer Constellation Brands cut its annual forecast last week and pointed to uncertainty over consumer spending on beer and spirits.

Brown-Forman said it will close its Louisville-based barrel-making facility on April 25, affecting about 210 employees and part of overall global workforce reductions. The company said it will source barrels from an unnamed foreign supplier in the future.

The announcement comes just days after the U.S. Surgeon General said alcoholic beverages must carry warnings about cancer risks and called for a review of guidelines for alcohol consumption limits.

Brown-Forman’s restructuring plan is expected to generate annual cost savings of $70 million to $80 million. The company will pay approximately $60 million to $70 million in severance and other charges.

The company announced that it will restructure its executive structure, including the appointment of a new Chief Marketing Officer and Chief Strategy Officer.

(Reporting by Juveria Thabasum in Bengaluru; Editing by Shilpi Majumdar)