BAT is rolling out an AI-driven productivity program that could cut jobs, as strong demand for its Velo nicotine pouch and next generation products boost annual profit. Photo credit: BAT.
British American Tobacco (BAT) announced a new artificial intelligence-driven productivity program that it expects will reduce its workforce, as the company reported higher annual profit driven by strong US demand for its Velo nicotine pouch and rising sales of newer products.
Interim finance chief Javed Iqbal said the initiative will focus on simplifying operations and increasing automation through data analytics and AI tools. He said the changes will affect staffing levels but declined to estimate how many jobs could be cut.
“It will have an impact on the size of the organization,” he said during a recent conference call, adding that it remains too early to determine how much of the workforce the program will affect.
The productivity push comes as BAT’s Velo nicotine pouch gains market share in the US from rival products, including those from Philip Morris International and Altria Group. The company attributed the gains to features such as higher nicotine strengths and lower pricing.
Chief executive Tadeu Marroco said the company sees continued growth potential for Velo in the US market.
“We are extremely encouraged by the US performance of Velo,” Marroco said on the call. “There is still plenty of opportunity for Velo to carry on growing.”
Velo now ranks second in US market share behind Philip Morris’ Zyn. The product forms part of BAT’s portfolio of newer offerings, which also includes its Vuse vape and heated tobacco products. The company continues to invest heavily in these categories to support future growth.
BAT reported double-digit growth in revenue from new products in the second half of the year and a 7% increase for the full year through December. Adjusted earnings per share rose 3.4% to 340.5 pence (US$4.29).
Newer smoking alternatives accounted for 18.2% of BAT’s total sales in 2025, up from 17.5% the previous year.
Marroco said performance in BAT’s Vuse vape segment has improved, although unregulated products in the market continue to weigh on results. He said regulatory efforts to curb illicit vape sales have delivered modest benefits but warned that market conditions will take time to recover. The company expects US vape performance to remain flat in 2026.
BAT also faces challenges in Australia and Bangladesh. In Australia, rising duties and an expanding illicit cigarette market have reduced demand. In Bangladesh, higher taxes and minimum-price rules have pressured sales.
Iqbal said the Australian market will continue to weigh on the company’s performance in 2026.
Revenue from BAT’s Asia-Pacific, Middle East, and Africa division fell more than 7% in 2025, limiting overall group revenue growth to 2.1%, compared with 1.3% growth in 2024.