British American Tobacco (BAT) has announced plans to reduce its global workforce by approximately 9,000 positions as the tobacco giant embarks on one of its most significant corporate restructuring programmes in recent years. The move forms part of a broader strategy to simplify operations, embrace artificial intelligence across its business, and strengthen its long-term competitiveness in an industry undergoing rapid transformation.
The restructuring will see around 5,500 jobs eliminated while roughly 3,500 additional roles will be outsourced to external partners. The programme is expected to affect nearly one-fifth of the company’s global workforce, although BAT has indicated that its operations in the United States, its largest market, will not be impacted by the latest round of changes.
Chief Executive Tadeu Marroco said the overhaul is designed to create a leaner, faster and more technology-driven organisation capable of responding to changing consumer preferences and increasing regulatory pressures. According to the company, artificial intelligence will play a central role in streamlining business processes, improving decision-making, and enhancing operational efficiency across multiple departments.
The restructuring is expected to generate annual cost savings of approximately £600 million by 2028. Those savings will be redirected toward strategic investments, particularly in BAT’s expanding portfolio of smoke-free products, which has become a key pillar of the company’s long-term growth strategy.
Like many major tobacco manufacturers, BAT has been grappling with a steady decline in cigarette consumption across several developed markets. Tougher regulations, higher tobacco taxes, growing public health awareness and changing consumer habits have continued to erode demand for traditional combustible tobacco products.
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In response, the company has accelerated investments in reduced-risk alternatives, including Vuse electronic cigarettes, Velo nicotine pouches and heated tobacco products. While these newer categories continue to record growth, they have yet to fully offset declining revenues from conventional cigarettes, which still account for the majority of BAT’s earnings.
As part of the transformation, BAT has expanded its collaboration with global technology and consulting firms to integrate AI-powered solutions into its operations. Some corporate functions have already been transferred to outsourcing partners in several international markets as the company seeks to standardise processes and improve productivity.
The restructuring also follows earlier operational changes, including factory closures and supply chain optimisation initiatives announced over the past year. These measures are intended to strengthen profitability while enabling the company to remain competitive in an increasingly challenging business environment.
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Despite management’s confidence in the strategy, investors reacted cautiously following the announcement, with BAT shares declining in early trading. Market analysts noted that while the planned savings could improve efficiency over time, the scale of the workforce reduction highlights the significant challenges facing the global tobacco industry as consumer preferences continue shifting away from traditional cigarettes.
The announcement reflects a wider corporate trend in which multinational companies are increasingly using artificial intelligence to automate routine tasks, reduce operating costs and reshape their workforce. While AI is expected to improve productivity, it is also raising concerns among labour groups over the future of thousands of white-collar jobs across multiple industries.
For BAT, the restructuring marks another step in its transition from a traditional tobacco manufacturer to a broader nicotine products company. Whether the strategy delivers sustainable long-term growth will largely depend on the continued expansion of its smoke-free business, regulatory developments, and consumer adoption of next-generation nicotine products in key global markets.
