British American Tobacco announced Monday that it will eliminate approximately 9,000 positions—nearly one-fifth of its global workforce—by the end of 2028. The cuts include 5,500 direct layoffs and 3,500 outsourced roles across operations in the UK, Poland, Romania, Costa Rica, Mexico, Singapore, and Malaysia.
Chief Executive Tadeu Marroco characterized the restructuring as necessary to build a "future-ready organisation" that is "more agile, cost disciplined and technology enabled." The company projects the cuts will generate £600 million in annual cost savings by the end of 2028.
The company is shifting toward automation and artificial intelligence as part of the overhaul. An outsourcing partnership with technology consultancy Accenture, initiated last year, is part of this strategy. Marroco said the arrangement would grant BAT access to Accenture's "advanced AI solutions." Work previously performed by BAT employees is now being handled by contractors.
In February, interim finance chief Javed Iqbal told the Financial Times that plans to simplify BAT would make it "more digital and AI-focused."
The geographic distribution of cuts shows operations in the US subsidiary Reynolds American face no reductions. Reynolds operates in a market where labor protections and wage standards remain stronger than in many of the locations targeted for cuts.
BAT has been monitoring declining demand for traditional cigarettes for years. The company projects global cigarette industry volumes will decline approximately 2.5% this year. The restructuring appears designed partly in response to investor pressure to pivot toward higher-margin smoke-free products like Vuse vapes and Velo nicotine pouches.
In January, BAT announced a South African factory closure, which the company attributed to competition from illicit trade.
BAT shares fell 1.4% in early trading Monday but remain up 11.8% year-to-date. Imperial Brands, a rival, saw its shares fall 1% on the news.
