BAT will cut about 5,500 jobs worldwide and outsource another 3,500 positions as part of a global restructuring and digital transformation program. Photo credit: BAT
British American Tobacco (BAT) will eliminate about 5,500 jobs worldwide and transfer another 3,500 positions to third-party providers as part of a sweeping restructuring program designed to reduce costs and accelerate its digital transformation.
The changes will affect approximately 9,000 employees, or nearly one-fifth of BAT's global workforce, although the company's US operations will not take part in the restructuring. The company did not disclose where it will cut jobs.
BAT expects its Fit2Win productivity program to generate an additional £600 million (US$793 million) in annualized savings by 2028, with £500 million (US$661 million) targeted by 2027. The initiative centers on greater use of artificial intelligence and strategic outsourcing, with professional services firm Accenture among the companies taking on transferred roles.
Chief executive Tadeu Marroco said the restructuring will help modernize the business.
"We are building a future-ready organization that is more agile, cost-disciplined, and technology-enabled," Marroco said. "These changes affect many of our colleagues and we are focused on supporting them through this transition with care and respect."
BAT first indicated in February that its new productivity initiative could result in workforce reductions, although analysts said the scale of the announced cuts exceeded expectations. The restructuring comes as BAT continues shifting its business toward smoke-free products, including Vuse vapor products and Velo nicotine pouches, while traditional combustible tobacco volumes continue to decline. The company forecasts industry sales volumes for traditional tobacco products will fall 2.5% this year.
The company said it has already streamlined its manufacturing footprint over the past 18-24 months, including previously announced factory closures in South Africa, Poland, Romania, and Malaysia. Most employees affected by the latest restructuring have already received confirmation of the planned changes, while consultations continue where local labor regulations require them.