Brown-Forman Corporation (BFB), a prominent U.S. producer of spirits and wine based in Louisville, announced significant operational changes on Tuesday. These include the closure of its cooperage facility in Louisville and a reduction in its global workforce.
These changes are integral to the company's strategic objectives to maintain sustained growth and enhance competitiveness within the dynamic global spirits market.
The restructuring efforts will involve a realignment of the executive leadership team, a decrease in workforce levels, and the permanent closure of the MacLean Avenue cooperage near Louisville's airport. This closure will result in the elimination of approximately 210 jobs and is expected to be finalized by April 25.
To support the impacted employees, Brown-Forman will provide severance packages, outplacement assistance, and comprehensive benefits based on their employment terms.
Going forward, the company will procure barrels from external suppliers to ensure a steady and competitively priced supply for its production demands.
Brown-Forman anticipates that the overall cost of these restructuring measures, including severance and related expenses, will range from $60 million to $70 million. However, the company plans to offset a portion of these costs with proceeds exceeding $30 million from the sale of the cooperage facility.
On a global scale, the company plans to reduce its workforce by approximately 12%, resulting in the loss of roughly 650 positions from its 5,400 employees worldwide. Brown-Forman remains committed to aiding those affected by the layoffs, providing comprehensive transition agreements that include severance, outplacement services, and additional resources to assist employees through this transition.
This restructuring represents a strategic shift for Brown-Forman as it seeks to optimize operations and solidify its presence in an increasingly competitive global market. While the company is facing immediate challenges, its focus remains on achieving long-term efficiency and sustainability within the rapidly evolving spirits industry.
On Tuesday, BFB concluded trading on the New York Stock Exchange at $34.45, reflecting a decrease of 0.06% or $0.02.
