Tobacco Giant BAT to Cut Thousands of Jobs in Major Restructuring

British American Tobacco (BAT) has announced it will cut approximately a fifth of its global workforce this year as part of a major transformation to reduce operational costs and accelerate the adoption of technology, including artificial intelligence (AI), across its business. The company, one of the world’s largest tobacco groups, said it will eliminate 5,500 positions by the end of the year while outsourcing an additional 3,500 jobs. In total, the move will affect around 9,000 of BAT’s roughly 47,000 employees worldwide. The efficiency drive comes as BAT faces declining demand for conventional cigarettes and mounting pressure to invest in alternative nicotine products. The FTSE 100-listed firm said the job cuts are part of a ‘transformation programme’ aimed at generating annual cost savings of £600 million by the end of 2028. CEO Tadeu Marroco stated the company is building a future-ready organisation that is more agile, more disciplined in cost management, and more supported by technology. He acknowledged the impact on many employees and said the company is focused on supporting them through the transition with care and respect. BAT confirmed the workforce reduction will not affect its operations in the United States, which are run through its subsidiary Reynolds American. The efficiency measures continue BAT’s digital transformation strategy, which included a partnership with consultancy Accenture last year to outsource certain functions. The company has already transferred jobs in the UK, Poland, Romania, Costa Rica, Mexico, Singapore, and Malaysia to Accenture. BAT’s interim CFO Javed Iqbal previously stated the simplification plan would make the company more digital and AI-focused. Alongside the restructuring, BAT is reducing its conventional cigarette production capacity in response to weakening global demand. The maker of Dunhill and Peter Stuyvesant brands earlier closed its eighth-largest factory in South Africa, citing increased competition from the illicit cigarette trade. The group expects global cigarette industry volumes to shrink by around 2.5% this year, extending a multi-year decline in demand for traditional tobacco products.