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More than 600 Brown-Forman workers are set to lose their jobs as the global spirits and wine maker seeks to realise up to $80m in annualised costs savings.
A multi-pronged initiative was revealed today (14 January) that also includes the planned closure and sale of a barrel-production facility in the US city of Louisville and the restructuring of its executive leadership team.
The Jack Daniel’s brand owner said around 12% of its 5,400-strong global workforce will be cut “to enhance operational efficiency and agility”.
Around 210 hourly and salaried jobs will go - part of the 12% group-wide staff reductions - connected with the closure of the Brown-Forman Cooperage in Louisville, slated for before the end of April this year.
Together, those moves will cost the New York-listed business around $60-70m in terms of severance packages and related expenses, but Brown-Forman said it expects to receive more than $30m from the facility sale.
“This organisational evolution will simplify and streamline Brown-Forman’s structure, allowing it to become a more agile and efficient organisation and reinvest in the capabilities, technologies, brands and people that will drive future growth”, according to a statement from the company.
Brown-Forman’s shares moved between positive and negative territory in the wake of the announcement. The stock traded at $34.46 as of 16:25 GMT today.
Brown-Forman said the barrel plant closure and employee reductions will deliver around $70-80m in annualised cost savings for the business, some of which will "be reinvested to accelerate growth”.
Growth was absent when Brown-Forman announced its first-half results in December. Reported net sales dropped 5% to $2bn in the six months to 31 October and was flat on an organic basis. Operating income, gross profits and margins also declined.
At the time, president and CEO Lawson Whiting cited “challenging economic conditions” for the performance but said growth would return in the back half of the 2025 financial year.
Commenting today, he said: “In 2025, Brown-Forman celebrates 155 years of delivering ‘Nothing Better in the Market’. We have achieved this impressive milestone in part because of our relentless focus on evolving our strategy, our portfolio, and our organisation to grow and thrive.
“Today’s announcement will ensure we have the structure and teams in place to continue on this path, while also making investments that we believe will facilitate growth for generations to come.”
Giving their take, Bernstein analysts wrote in a research note that the announcements were “an incremental positive for investors amidst lots of uncertainty”, albeit they said Brown-Forman’s shares were trading at “all-time lows”.