British American Tobacco (BAT) has announced plans to reduce its global workforce by around 9,000 positions as part of a sweeping cost reduction strategy, with the exercise expected to be completed before the end of the year.
The tobacco manufacturer, known for brands such as Lucky Strike and Dunhill, will eliminate 5,500 jobs while outsourcing another 3,500. Although the company did not disclose the locations that will be affected, it confirmed that its operations in the United States will remain untouched.
Earlier this year, BAT revealed plans to streamline its operations as it pivots towards becoming a more digitally driven and artificial intelligence-focused business.
The company is responding to declining cigarette sales as more consumers opt for alternatives such as vaping devices and nicotine pouches. It has increasingly invested in products including Vuse vapes and Velo nicotine pouches, although growth in these categories has yet to significantly boost revenues and profitability.
BAT employs approximately 47,000 people globally and expects the restructuring programme to generate annual savings of about £600 million by 2028.
Its largest market, the United States, has experienced weaker sales as inflation and the rising cost of living push smokers towards cheaper tobacco brands. The company is also grappling with higher taxes and tighter regulations across several markets.
Also Read: Kenya Introduces Digital Platform to Enforce Local Marine Cargo Insurance Rules
In the US, stricter regulatory approvals for new vaping products have slowed product launches. BAT argues that these delays have encouraged the spread of unregulated Chinese-made products, eroding both its sales and market share.
According to market analyst Dan Coatsworth of AJ Bell, the tobacco industry’s shift from conventional cigarettes to next-generation nicotine products has progressed more slowly than anticipated, with legal manufacturers facing stiff competition from illicit products.
BAT Chief Executive Tadeu Marroco said the restructuring would create a leaner, more efficient and technology-enabled organisation. He added that the company is committed to supporting affected employees throughout the transition.
In Kenya, BAT has previously reorganised its manufacturing operations in Nairobi, resulting in job losses linked to automation, the growth of illicit trade and changes in tax policies. BAT Plc holds a 60 per cent controlling stake in BAT Kenya.
