- British American Tobacco (BAT) is cutting 9,000 jobs globally as part of a major restructuring effort to address declining cigarette demand.
- The job cuts represent nearly one-fifth of BAT's 47,000 employees outside its US business.
- BAT plans to reduce 5,500 jobs and outsource 3,500 roles by the end of this year.
- Cost cuts are expected to save about £600 million a year by 2028.
- Chief executive Tadeu Marroco stated that the cuts would make the company more agile, cost disciplined and technology enabled.
- BAT is facing declining demand for combustible tobacco products, with projections indicating a 2% contraction in global cigarette industry volumes by 2026.
- The company is increasing its reliance on automation and artificial intelligence as part of its restructuring.
- BAT has expanded outsourcing partnerships with Accenture, transferring functions including service centres across multiple countries.
British American Tobacco (BAT) is undergoing a significant restructuring, cutting approximately 9,000 jobs globally, which represents nearly 20% of its workforce. This move is part of a broader strategy to address declining demand for traditional cigarettes and pivot towards digital and AI-driven operations.16
The company, known for brands like Lucky Strike and Dunhill, plans to eliminate 5,500 positions and outsource another 3,500 roles by the end of this year. Chief Executive Tadeu Marroco stated that these changes will make BAT "more agile, cost disciplined and technology enabled."5
BAT's workforce reduction is expected to save the company about £600 million annually by 2028. The restructuring reflects the company's response to a projected 2% contraction in global cigarette industry volumes by 2026, highlighting the challenges facing the tobacco sector.4
The company has also expanded its outsourcing partnerships, notably with Accenture, to streamline operations across various countries, including the UK, Costa Rica, and Malaysia. This shift towards automation and AI is reshaping staffing requirements, with an estimated £500 million of the targeted savings expected to be realized by 2027.78
As BAT continues to adapt, the internal notice detailing these job cuts underscores the scale of change at the tobacco giant, which is increasingly focusing on next-generation nicotine alternatives like vapes.
“British American Tobacco is set to cut 9,000 jobs globally, which is nearly a fifth of its workforce, as part of a major restructuring. This move reflects the company's response to weakening demand for combustible tobacco products and a shift towards next-generation nicotine alternatives.”
BBC
