BAT announces 9,000 job cuts as part of AI-led overhaul
British American Tobacco (BAT) is set to cut nearly 9,000 jobs worldwide as it embarks on a major restructuring initiative driven by artificial intelligence. The company will eliminate 5,500 roles directly, while an additional 3,500 positions will be outsourced to third-party providers, according to a Reuters report.
The restructuring is part of BAT’s broader push to become more technologically enabled and improve productivity. CEO Tadeu Marroco said in a statement, "These changes affect many of our colleagues, and we are focused on supporting them through this transition with care and respect."
Cost savings and strategic shift towards smoke-free products
The job cuts are expected to generate annualised incremental savings of USD 793 million by 2028, the report added. The move aims to make the company more agile, cost-disciplined, and technology-driven, Marroco explained.
BAT is increasingly focusing on vapes and nicotine pouches as it seeks to make these smoke-free alternatives the mainstay of its business strategy. The company has been struggling with declining cigarette sales and sluggish profits as the industry shifts away from traditional tobacco products.
Regulatory pressures and illicit trade challenges
BAT faces strict regulations and duty hikes in key markets such as the United States, where consumers are switching to cheaper tobacco that often escapes scrutiny. The company is also contending with an influx of cheap Chinese tobacco, which is straining conventional players.
Earlier this year, BAT ordered the closure of its South African facility due to growing illicit trade in the country. The facility had been operating at just 35% capacity because of severe volume losses from the booming illicit market.
Partnership with Accenture to drive digital transformation
Last year, BAT announced a partnership with Accenture to accelerate its transformation into a faster, more agile, and technologically-driven business. The collaboration aims to overhaul BAT’s Global Business Solutions function and Supply Network Operations.
BAT stated, "This collaboration will help simplify processes, improve speed to market, enhance compliance agility and create a foundation for future growth."
Shares of BAT fell 1.7% on Monday following the announcement.
