Brown-Forman is to cut around 12% of its workforce as part of efforts to reduce costs.
Around 650 employees are set to be laid off globally by the Jack Daniel’s maker, which has been affected by falling alcohol consumption and rising raw material costs in recent quarters.
Brown-Forman said “the difficult decision” had been made to enable it to “become a more agile and efficient organisation and reinvest in the capabilities, technologies, brands and people that will drive future growth”.
Net sales at the group fell organically by 1% in the six months ended 31 October 2024, while gross profits slid 4%.
The Kentucky-headquartered company also announced the closure of its Louisville-based barrel-making operation. Brown-Forman Cooperage will shut its doors in April, impacting 210 employees.
Brown-Forman would now source barrels from an external supplier, the group said, insisting this would “ensure a steady supply of the same high-quality barrels at a competitive price”.
Collectively, the moves would result in annualised cost savings in the region of $70m-$80m (£57m-£66m), Brown-Forman said, adding it expected to incur one-off severance and other charges of $60m-$70m as a result of the layoffs.
“I want to express my sincere gratitude to our employees, particularly those impacted by these changes, for their dedication and contributions to Brown-Forman,” said Brown-Forman CEO Lawson Whiting. “We are committed to supporting them through this transition and are confident that these strategic initiatives will ensure the company endures for generations to come.”
News of the layoffs came alongside a restructuring of Brown-Forman’s executive leadership team. Jeremy Shepherd has been named its chief marketing officer, having previously led the company’s US & Canada commercial division.
Chris Graven has also been appointed as chief strategy officer. Graven had previously held roles in HR, finance, marketing and commercial over a 20-year period at Brown-Forman, the company said.
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