US: Brown-Forman to cut 250 jobs

Brown-Forman is to cut 6% of its global workforce as part of a US$25m cost savings programme made necessary by the economic downturn, the US spirits firm has said.

Around 250 jobs out of a global workforce of 4,100 will go as part of the cost-cutting drive, which will be implemented from the start of Brown-Forman's fiscal 2010 on 1 May, the firm said today (20 April).

Cuts will be made due to "difficult economic conditions around the world" and the programme has been devised to save $15 to $25m annually from fiscal 2010, said the group, which owns Jack Daniel's and Southern Comfort whiskeys.

"While this was a very difficult decision to make, I believe it is necessary to best position Brown-Forman for both the difficult times we are confronting today and the uncertain and challenging environment that we expect ahead of us," said Brown-Forman CEO Paul Varga.

Most jobs will be lost in the company's Mexico and US divisions, with fewer positions set to go in Europe and Asia Pacific region.

Among other cost-cutting initiatives planned for fiscal 2010, Brown-Forman is offering early retirement to certain eligible US employees, eliminating merit increases for all employees, and cutting back on discretionary spending, including travel and meetings.

The company estimated a fourth quarter charge for fiscal 2009 of $0.05 to $0.07 per share as a result of the savings drive. This one-time charge was anticipated in the company's previously reported earnings per share guidance, which remains in the range of $2.70 to $2.90 per share, it said.

Earlier today, Brown-Forman declined to comment to just-drinks on a report that it is eyeing a tie-up with Bacardi.

Separately, just-drinks understands that the two have been in contact over a potential deal.