British American Tobacco to slash 9,000 jobs as it turns to AI
✓British American Tobacco (BAT) will cut about a fifth of its 47,000-strong workforce this year, as the cigarette-maker looks for ways to push down costs and become more “technology enabled”.
BAT, which is one of the biggest tobacco groups in the world, has announced it will cut 5,500 jobs by the end of the year and outsource a further 3,500, affecting a total of 9,000 employees.
The FTSE 100 company is grappling with falling demand for traditional cigarettes and pressure to invest in nicotine alternatives.
The company said the cuts were part of a “transformation programme” expected to create £600m of annual cost savings by the end of 2028.
The BAT chief executive, Tadeu Marroco, said the company was “building a future-ready organisation” that was “more agile, cost disciplined and technology enabled”.
He added: “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.”
There will be no cuts in its business in the US, where it operates under its subsidiary Reynolds American.
Last year, BAT partnered with the technology consultancy Accenture to outsource some of its work, which Marroco said at the time would give the tobacco company access to its “advanced AI solutions”. Some jobs in the UK, Poland, Romania, Costa Rica, Mexico, Singapore and Malaysia have been absorbed by Accenture since the deal, BAT said.
In February, the BAT interim finance chief, Javed Iqbal, told the Financial Times that plans to simplify the company would make it “more digital and AI-focused”.
BAT, which makes Dunhill and Peter Stuyvesant cigarettes, has also been shutting down some of its traditional cigarette manufacturing. In January, it announced it would close its eighth largest factory, located in South Africa, because of competition from illicit trade.
The group has predicted that global cigarette industry volumes will fall by about 2.5% this year.
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The company, which is listed and headquartered in London, has been investing heavily in smoke-free products such as Vuse vapes and Velo nicotine pouches.
It told investors this month that revenue growth in this “new categories” part of the business was accelerating, and mid-teen percentage growth was expected this year.
Shares in BAT fell by about 1.4% in early trading on Monday, although they were still up by about 11.8% in the year to date. Shares in its rival Imperial Brands also fell by 1% in early trading on Monday.
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British American Tobacco is reducing its workforce by approximately 9,000 people this year through direct cuts and outsourcing. The company describes this as part of a multi-year transformation programme designed to lower costs by £600 million annually by 2028 and increase technological capability. BAT, which employs around 47,000 people globally, is navigating structural decline in traditional cigarette demand while investing in nicotine alternatives such as vapes and pouches. The company has partnered with Accenture to handle some functions, a partnership begun last year partly to access advanced technology solutions. Its US operations under Reynolds American remain unaffected. BAT has previously closed manufacturing sites and expects global cigarette volumes to decline further.
Read the full story at BBC ↗ · The Guardian ↗
British American Tobacco (BAT) will cut about a fifth of its 47,000-strong workforce this year, as the cigarette-maker looks for ways to push down costs and become more “technology enabled”.
BAT, which is one of the biggest tobacco groups in the world, has announced it will cut 5,500 jobs by the end of the year and outsource a further 3,500, affecting a total of 9,000 employees.
The FTSE 100 company is grappling with falling demand for traditional cigarettes and pressure to invest in nicotine alternatives.
The company said the cuts were part of a “transformation programme” expected to create £600m of annual cost savings by the end of 2028.
The BAT chief executive, Tadeu Marroco, said the company was “building a future-ready organisation” that was “more agile, cost disciplined and technology enabled”.
He added: “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.”
There will be no cuts in its business in the US, where it operates under its subsidiary Reynolds American.
Last year, BAT partnered with the technology consultancy Accenture to outsource some of its work, which Marroco said at the time would give the tobacco company access to its “advanced AI solutions”. Some jobs in the UK, Poland, Romania, Costa Rica, Mexico, Singapore and Malaysia have been absorbed by Accenture since the deal, BAT said.
In February, the BAT interim finance chief, Javed Iqbal, told the Financial Times that plans to simplify the company would make it “more digital and AI-focused”.
BAT, which makes Dunhill and Peter Stuyvesant cigarettes, has also been shutting down some of its traditional cigarette manufacturing. In January, it announced it would close its eighth largest factory, located in South Africa, because of competition from illicit trade.
The group has predicted that global cigarette industry volumes will fall by about 2.5% this year.
after newsletter promotion
The company, which is listed and headquartered in London, has been investing heavily in smoke-free products such as Vuse vapes and Velo nicotine pouches.
It told investors this month that revenue growth in this “new categories” part of the business was accelerating, and mid-teen percentage growth was expected this year.
Shares in BAT fell by about 1.4% in early trading on Monday, although they were still up by about 11.8% in the year to date. Shares in its rival Imperial Brands also fell by 1% in early trading on Monday.
Read the full story at BBC ↗ · The Guardian ↗
British American Tobacco will cut 5,500 jobs directly and outsource 3,500 additional positions in 2024 This affects approximately one-fifth of BAT's 47,000-person workforce The cuts are described by BAT as part of a 'transformation programme' The programme is expected to generate £600 million in annual cost savings by the end of 2028 BAT is 'building a future-ready organisation' that is 'more agile, cost disciplined and technology enabled' The company faces falling demand for traditional cigarettes BAT has partnered with Accenture to outsource functions and access 'advanced AI solutions' Some roles in the UK, Poland, Romania, Costa Rica, Mexico, Singapore and Malaysia have been transferred to Accenture US operations under Reynolds American subsidiary will see no cuts BAT is investing in smoke-free alternatives including Vuse vapes and Velo nicotine pouches The company predicts global cigarette industry volumes will fall by approximately 2.5% this year Revenue in 'new categories' is expected to show mid-teen percentage growth this year
Read the full story at BBC ↗ · The Guardian ↗
- British American Tobacco will cut 5,500 jobs directly and outsource 3,500 more in 2024, affecting roughly a fifth of its 47,000-person workforce
- The cuts are part of a transformation programme targeting £600m in annual cost savings by 2028, with emphasis on AI and technology integration
- BAT faces declining demand for traditional cigarettes and is investing heavily in smoke-free alternatives like vapes and nicotine pouches
- The company will maintain US operations unchanged and has already begun transferring some roles to technology partner Accenture