Brown-Forman to restructure globally, cut 12% of workforce

Investing.com -- Brown-Forman has announced a global restructuring plan that will result in a 12% reduction of its 5,400 global employees.

The company's move is part of a larger plan to streamline operations and reduce costs.

As part of this restructuring, the company will be closing its Louisville-based barrel-making operation, Brown-Forman Cooperage, by April 25. Instead of producing barrels in-house, Brown-Forman will source them from an external supplier.

The company expects to see annualized cost savings in the range of $70 million to $80 million as a result of these changes. A portion of these savings is anticipated to be reinvested to accelerate the company's growth.

In connection with the sale of its cooperage assets, Brown-Forman is predicting proceeds of more than $30 million. However, the company also anticipates incurring charges of approximately $60 million to $70 million for severance and related costs due to the restructuring.

The charges, which are expected to be primarily cash expenditures, will be recognized mostly in fiscal 2025.

The restructuring plan is set to be substantially implemented in the same fiscal year, with the remainder expected to be completed by the end of fiscal 2026.

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Source: Investing.com