(Reuters) -Brown-Forman mentioned on Tuesday it’s going to lay off about 12% of its international workforce of 5,400 staff, because the Jack Daniel’s maker seems to be to cut back prices amid weak alcohol demand.
The corporate has struggled with excessive enter prices, together with of uncooked supplies similar to agave and wooden barrels, and raised costs for its whiskey manufacturers to protect margins.
Shoppers have additionally traded right down to cheaper manufacturers as they cope with larger prices of dwelling. Brown-Forman’s peer Constellation Manufacturers lower its annual forecast final week and flagged uncertainty round client spending on its beers and spirits.
Brown-Forman mentioned it’s going to shut its Louisville-based barrel-making facility by April 25, which can influence about 210 staff and is a part of the general international workforce discount. The corporate mentioned it’s going to supply barrels from an unnamed exterior provider sooner or later.
The announcement comes simply days after the U.S. Surgeon Common mentioned alcoholic drinks ought to carry a warning about most cancers dangers on their labels and known as for pointers on alcohol consumption limits to be reassessed.
Brown-Forman’s restructuring plan is predicted to generate about $70 million to $80 million in annualized value financial savings. The corporate is predicted to incur about $60 million to $70 million in severance and different prices associated to the layoffs.
The corporate additionally mentioned it’s going to restructure its government management, together with appointing a brand new chief advertising officer and a chief technique officer.
(Reporting by Juveria Tabassum in Bengaluru; Modifying by Shilpi Majumdar)
