(Reuters) -Brown-Forman said on Tuesday it is going to lay off about 12% of its global workforce of 5,400 employees, because the Jack Daniel’s maker looks to scale back costs amid weak alcohol demand.

The corporate has struggled with high input costs, including of raw materials akin to agave and wood barrels, and raised prices for its whiskey brands to shield margins.

Consumers have also traded right down to cheaper brands as they take care of higher costs of living. Brown-Forman’s peer Constellation Brands cut its annual forecast last week and flagged uncertainty around consumer spending on its beers and spirits.

Brown-Forman said it is going to close its Louisville-based barrel-making facility by April 25, which can impact about 210 employees and is a component of the general global workforce reduction. The corporate said it is going to source barrels from an unnamed external supplier in the long run.

The announcement comes just days after the U.S. Surgeon General said alcoholic drinks should carry a warning about cancer risks on their labels and called for guidelines on alcohol consumption limits to be reassessed.

Brown-Forman’s restructuring plan is anticipated to generate about $70 million to $80 million in annualized cost savings. The corporate is anticipated to incur about $60 million to $70 million in severance and other charges related to the layoffs.

The corporate also said it is going to restructure its executive leadership, including appointing a latest chief marketing officer and a chief strategy officer.

(Reporting by Juveria Tabassum in Bengaluru; Editing by Shilpi Majumdar)