British American Tobacco (BAT) has announced plans to eliminate approximately 5,500 positions and outsource an additional 3,500 roles by the end of this year, affecting a total of 9,000 employees. The cuts represent about a fifth of the company's 47,000-strong global workforce.
Transformation programme targets £600m in annual savings
The FTSE 100 tobacco giant said the job reductions are part of a broader “transformation programme” expected to generate £600m in annual cost savings by the end of 2028. The company is grappling with declining demand for traditional cigarettes and increasing pressure to invest in nicotine alternatives.
BAT chief executive Tadeu Marroco described the initiative as building “a future-ready organisation that is more agile, cost disciplined and technology enabled”. He added: “These changes affect many of our colleagues, and we are focused on supporting them through this transition with care and respect, as we position the business for the future.”
US operations spared from cuts
No job cuts will occur in the United States, where BAT operates through its subsidiary Reynolds American. Last year, BAT partnered with technology consultancy Accenture to outsource some work, a move Marroco said would give the company access to “advanced AI solutions”. BAT confirmed that some roles in the UK, Poland, Romania, Costa Rica, Mexico, Singapore and Malaysia have been absorbed by Accenture since the deal.
In February, BAT interim finance chief Javed Iqbal told the Financial Times that plans to simplify the company would make it “more digital and AI-focused”.
Traditional cigarette manufacturing scaled back
BAT, which produces Dunhill and Peter Stuyvesant cigarettes, has also been shutting down some traditional cigarette manufacturing. In January, it announced the closure of its eighth largest factory in South Africa, citing competition from illicit trade.
The group has predicted that global cigarette industry volumes will fall by about 2.5% this year.
Investment in smoke-free products accelerates
The company, headquartered and listed in London, has been investing heavily in smoke-free products such as Vuse vapes and Velo nicotine pouches. Earlier this month, BAT told investors that revenue growth in this “new categories” segment was accelerating, with mid-teen percentage growth expected this year.
Shares in BAT fell by about 1.4% in early trading on Monday, though they remain up about 11.8% year to date. Shares in rival Imperial Brands also fell by 1% in early trading.
