US: Brown-Forman is to axe 250 jobs in a bid to reduce costs by $15-25 million.
The company announced that approximately 250 of its 4,100 global workforce would be made redundant. The majority of these will occur in Mexico and the US, with fewer positions eliminated in Europe and the Asia Pacific region.
The company said that due to the difficult economic conditions around the world, it is implementing several initiatives to reduce costs during fiscal 2010, which starts 1 May, 2009.
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.
These actions are projected to save Brown-Forman between $15 million and $25 million in fiscal 2010. The company estimates a fourth quarter charge of approximately $0.05 to $0.07 per share, for severance and related costs associated with the workforce reduction and early retirement programme. 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 a share.
Brown-Forman CEO Paul Varga said: “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.”
All employees affected by the reduction in force will be offered severance pay, career counseling assistance, and other benefits.
Varga added: “I believe these and other key decisions we have made will help Brown-Forman continue to compete effectively in this tough economy.
“We’re confident that our healthy balance sheet, great brands, excellent people, and committed long-term shareholders will enable our company to remain both strong and independent for generations to come.”
Brown-Forman Corporation is a producer and marketer brands including Jack Daniel’s, Southern Comfort, Finlandia, Canadian Mist, Fetzer, Korbel, Gentleman Jack, el Jimador, Tequila Herradura, Sonoma-Cutrer, Chambord, Tuaca, Woodford Reserve, and Bonterra.