Largest supplier of wine in U.S. faces layoffs and closure of key Napa facility
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California wine giant Gallo is laying off more than 90 employees and closing a major Napa Valley wine-making facility.
The Modesto company said Thursday the cuts are necessary to adapt to market dynamics and changing customer demands.
In total, 93 employees across five sites will lose their jobs, according to a Worker Adjustment and Retraining Notice the company filed with the state last week.
The “operational adjustments” will not “materially impact” the company’s tasting rooms in Napa, Sonoma and Paso Robles, a spokesperson for the company said in a statement.
Amazon announced Tuesday it would close all of its brick-and-mortar Amazon Fresh and Amazon Go stores, with plans to convert some locations into Whole Foods.
Gallo plans to permanently close its Ranch Winery in St. Helena. In 2015, the company bought the “custom crush winery” capable of crushing 30,000 tons of grapes, hoping to bolster its presence in the super-premium and luxury wine segment. That investment has not panned out.
The closure means 56 employees — including more than three dozen wine technicians — will lose their jobs between April 15 and the end of January 2027, according to the notice.
Layoffs are also planned at Louis M. Martini Winery and Orin Swift Tasting Room in St. Helena and J Vineyards & Winery and Frei Ranch in Healdsburg.
In 2025, Gallo closed its Courtside Cellars winery in San Miguel and laid off 47 workers, according to the San Luis Obispo Tribune.
California’s wine country struggles with changing tastes, foreign competition and too many grapes on the vine.
The layoffs are indicative of the U.S. wine industry’s broader struggles amid shifting tastes.
Customers are choosing quality, not quantity: they would rather buy fewer bottles and invest in a premium product, said Rob McMillan, Silicon Valley Bank’s executive vice president and wine expert.
Many of Gallo’s wines fall into the sub-$12 category, which has performed poorly for the last decade, McMillan said.
With younger generations drinking less, and the baby boomer generation — the industry’s core base — aging out of the wine market, it’s been a challenging few years for the industry, which has also had to fend off competition from makers of premium beers and spirits, McMillan said.
Wine shops and importers have also been caught in the crossfire of President Trump’s trade war.
Bars, wine shops and importers are anxious about Trump’s proposed tariffs, which they say will imperil an industry already facing serious challenges.
Founded in 1933 as E. & J. Gallo Winery, the company in 2024 renamed itself to reflect its portfolio, which by then had grown beyond wine to include distilled spirits, malt beverages and ready-to-drink cocktails.
The privately held company is the largest supplier of wine in the U.S. by volume, according to the wine trade publication WineBusiness Monthly, which estimated that it sold 90 million cases of wine in 2025.
Gallo owns more than 100 brands — including the popular Barefoot and Apothic labels — and had more than 7,000 employees worldwide, according to a 2023 company statement.
