British American Tobacco (BAT) has announced plans to cut nearly 9,000 jobs worldwide as the tobacco giant launches a major cost-reduction programme aimed at making the company more technology-focused and improving efficiency.
The company, which employs about 47,000 people globally, said it will eliminate around 5,500 positions and outsource a further 3,500 roles as part of a restructuring exercise expected to be completed by the end of the year.
BAT did not disclose which countries would be affected by the reductions but said the United States, its largest market, would not be impacted by the job cuts.
The restructuring follows an earlier announcement by the company that it was seeking savings as it transforms into a more digital and artificial intelligence-focused business.
BAT, which owns cigarette brands including Lucky Strike and Dunhill, has been facing major changes in the global tobacco market as traditional cigarette consumption declines and consumers increasingly shift toward alternatives such as vaping products and nicotine pouches.
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The company has been investing heavily in so-called next-generation products, including its Vuse vaping brand and Velo nicotine pouches, in an effort to find new sources of growth beyond conventional cigarettes.
However, the transition has been slower than expected, with sales growth and profit margins remaining under pressure in recent years.
BAT said the cost-cutting programme is expected to deliver annual savings of about £600 million (approximately US$820 million or Sh102.9 billion) by 2028.
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The company has also been dealing with challenges in the United States, where higher living costs have encouraged some smokers to switch to cheaper cigarette brands. At the same time, rising taxes, stricter regulations and increasing competition have weighed on the industry.
American regulators have taken a tougher approach toward approving licences for new nicotine products, delaying launches and creating challenges for companies attempting to expand their vaping portfolios.
BAT has argued that regulatory delays have contributed to the growth of illegal and unregulated vaping products, particularly from Chinese manufacturers, which have affected sales and market share for established companies.
“The tobacco industry has found the transition from cigarettes to next-generation products to be a slow one,” said Dan Coatsworth, head of markets at investment firm AJ Bell.
“Vaping is now commonplace, yet product manufacturers are battling challenging market conditions caused by a proliferation of illegal products.”
BAT Chief Executive Tadeu Marroco said the restructuring would help create a leaner and more adaptable organisation capable of competing in a rapidly changing market.
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“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,” Marroco said.
The company said the changes would make BAT “more agile, cost disciplined and technology enabled” as it continues shifting resources toward digital operations and alternative nicotine products.
The restructuring could also have implications for BAT’s African operations, including Kenya, where the company has previously undertaken changes at its Nairobi manufacturing facilities.
BAT Kenya has restructured its operations in recent years amid challenges linked to automation, illicit tobacco trade and changing tax regulations.
British American Tobacco Plc remains the controlling shareholder of BAT Kenya, holding a 60 percent stake in the Nairobi-listed company.
The global tobacco industry has been under sustained pressure as governments tighten public health regulations, raise excise taxes and encourage reduced smoking rates. Companies such as BAT, however, have sought to offset declining cigarette sales by expanding into vaping, nicotine pouches and other reduced-risk products.
The latest job cuts highlight the scale of the transformation underway at one of the world’s largest tobacco companies as it attempts to balance cost pressures, regulatory challenges and changing consumer behaviour.
