04:12 PM EST, 01/14/2025 (MT Newswires) -- Brown-Forman's (BF.A, BF.B) decision on Tuesday to cut 12% of its global workforce and close a US barrel-making facility signals the company is facing multiple headwinds, analysts at Needham said in a report.

The maker of Jack Daniel's whiskey and other spirits is expected to cut about 648 employees from its 5,400 global workforce. Roughly 210 of those jobs will result from the closure of Brown-Forman's cooperage in Louisville, Kentucky. Brown-Forman also restructured its executive leadership team, a move that includes the consolidation and streamlining of its commercial structure.

"As a company that has always managed its business through a very long-term lens with a focus on its employees, this is clearly a decision that (Brown-Forman) would not take lightly, and underscores the many headwinds taking place in spirits," Needham analysts Gerald Pascarelli and Jack Siedow said.

Among key industry issues are supply and demand imbalances that persist due to "weak consumer takeaway trends" in a challenging macro environment, according to Pascarelli and Siedow. Needham reiterated a hold rating on the stock.

The company expects the restructuring to deliver between $70 million and $80 million in annualized cost savings, which it plans to reinvest to "accelerate growth," according to a Brown-Forman statement. More than $30 million in proceeds would be generated from the sale of the cooperage assets. The workforce reduction and the cooperage closure are expected to cost $60 million to $70 million.

"This organizational evolution will simplify and streamline Brown-Forman's structure, allowing it to become a more agile and efficient organization and reinvest in the capabilities, technologies, brands, and people that will drive future growth," the company said.

Jeremy Shepherd will now serve as chief marketing officer after previously leading the company's USA and Canada commercial division. Chris Graven, a 20-year veteran of Brown-Forman, became chief strategy officer.

The actions announced by the company are not an effort to get ahead of potential tariffs on American whiskey, Pascarelli and Siedow said.