British American Tobacco (BAT) has announced it will lay off 5,500 employees and outsource 3,500 additional roles globally. This sweeping restructuring comes as the London-listed tobacco giant grapples with declining traditional cigarette sales and seeks to aggressively pivot toward smokeless nicotine alternatives.
The job cuts and outsourcing measures will impact approximately 9,000 employees in total—nearly one-fifth of BAT’s global workforce of 47,000. According to the company, these measures are designed to save £600 million ($760 million) annually by 2028. While the restructuring spans BAT’s global footprint, its largest single market, the United States, is excluded from these cuts.
BAT is navigating a challenging transition as health concerns and tightening regulations shrink traditional cigarette markets. To secure its future, the company is betting heavily on “smokeless” alternatives, including:
- Vuse e-cigarettes
- glo heated tobacco devices
- Velo nicotine pouches
The company aims to derive half of its revenue from these newer categories by 2035. However, regulatory hurdles in the US have slowed down approvals, complicating the transition.
| Restructuring Metric | Details / Targets |
|---|---|
| Direct Layoffs | 5,500 positions globally |
| Outsourced Roles | 3,500 positions (partially to Accenture) |
| Total Workforce Affected | ~9,000 employees (approx. 20% of total) |
| New Annual Cost Savings | £600 million by 2028 |
| Existing Cost Savings Target | £500 million by 2027 |
| Smokeless Revenue Goal | 50% of total revenue by 2035 |
CEO Tadeu Marroco framed the layoffs as a necessary step to build a more agile, technology-focused organization. However, investors reacted with caution, sending BAT shares down 2.5% on the London Stock Exchange. Analysts at Barclays noted the scale of the layoffs caught the market off guard, while AJ Bell warned the cuts reflect a broader corporate trend of relying on technology to streamline operations at the expense of jobs.
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