Brown-Forman to Lay Off 12% of Global Workforce

Global drinks corporation Brown-Forman announced plans this week to shed about 12% of its staff worldwide, as the U.S. spirits industry faces several headwinds.

These layoffs will total approximately 5,400 employees. Brown-Forman will shutter its historic cooperage near Louisville International Airport, affecting about 210 employees, and will instead source whiskey barrels in the future.

Factors playing into this decision include the rising costs of materials as well as weakening consumer demand in America for distilled spirits.

Another potential issue for the industry in the next few years is the threat of trade tariffs by incoming President Trump. As American whiskey sales have cooled off in recent time, many distilleries have pointed to still-growing global sales as picking up the slack on the bottom line. Tariffs could put that scenario in danger.

The slowdown of sales for U.S. spirits was a major trend in 2024, and will continue to affect the industry this year and beyond. Many whiskey enthusiasts overbought bottles during and immediately after the pandemic, stuffing their basements full, with little room left now for additional purchases. In turn, this has caused overstocking issues for both retailers and distributors.

Lingering economic uncertainty, led by inflation, also has customers spending less on alcohol. The drinking habits of Gen Z is another major factor, as that generation consumes comparatively little alcohol, preferring no- and low-ABV products instead.

Brown-Forman, whose stock is down 38% in the last year, is hardly the only alcohol company affected by these issues. Constellation Brands cut its annual forecast last week in light of weakening consumer spending on alcohol; its stock is down 30% in the past twelve months. Meanwhile, MGP Ingredients — also hampered by serious management issues — has seen its stock price fall 60% in the last year.

Feature photo by Marcel Strauß on Unsplash.

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