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

(Reuters) – Brown-Forman said on Tuesday it would cut about 12% of its global workforce of 5,400 employees as the maker of Jack Daniel’s seeks to cut costs amid weak alcohol demand.

The company has struggled with high import costs, including raw materials such as agave and wooden casks, and has raised prices on its whiskey brands to protect margins.

Consumers also traded on cheaper brands as they deal with higher living costs.Brown-Forman’s peer Constellation Brands cut its annual forecast last week and pointed to uncertainty over consumer spending on its beer and spirits.

Brown-Forman said it will close its Louisville barrel facility by April 25, affecting about 210 employees and part of an overall global workforce reduction.The company said future barrels will be sourced from an unnamed outside supplier.

The announcement comes just days after the US surgeon general said alcoholic beverages must carry cancer risk warnings on their labels and called for a reevaluation of guidelines on alcohol consumption limits.

Brown-Forman’s restructuring plan is expected to generate about $70 million to $80 million in annual cost savings.The company is expected to incur about $60 million to $70 million in severance and other costs related to the layoffs.

The company also said it will restructure its executive leadership, including the appointment of a new chief marketing officer and chief strategy officer.

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