British American Tobacco is cutting approximately 9,000 jobs, which is about one-fifth of its global workforce of 47,000, according to a report by Bloomberg.
The move by BAT is part of a sweeping restructuring programme designed to reduce costs and simplify operations, with the tobacco giant targeting £600 million in annual savings by the end of 2028.
The figures exclude BAT’s US business, which is operated through its subsidiary Reynolds American Inc.
According to an internal notice seen by Bloomberg, BAT says by the end of this year, it will have eliminated 5,500 jobs and outsourced a further 3,500 roles.
Pallav Mittal, an analyst at Barclays, said the scale of the workforce reduction was likely to catch investors off guard despite prior awareness of the broader savings programme.
“Whilst the market has been aware of this savings programme, we think the scale of this workforce reduction is unexpected and could come as a surprise to investors,” he wrote in a note.
The Bloomberg report shows BAT shares fell as much as 1.9% in London following the disclosure, trimming year-to-date gains, though the stock remained up nearly 13% since the start of the year through Friday’s close.
BAT said most of its planned cost savings, approximately £500 million of the £600 million target, will be delivered by 2027, with the restructuring spanning most countries where the company operates.
The cuts reflect falling demand for traditional cigarettes in many markets and the need to invest in smoke-free nicotine alternatives, including Vuse vapes and Velo nicotine pouches, which have grown rapidly in popularity as consumers seek alternatives to smoking.
BAT’s Interim Chief Financial Officer Javed Iqbal said in February that the deployment of artificial intelligence and data analytics tools would also affect staffing levels as the company modernises its operations.
Part of BAT’s restructuring involves closing traditional cigarette manufacturing facilities.
The company has previously said it is in the process of shutting its eighth largest cigarette factory, located in South Africa, citing competition from illicit trade as the primary factor behind the closure, Bloomberg reports.
Like rival Philip Morris International, BAT is targeting a position where more than half of its revenue comes from smoke-free products rather than traditional cigarettes — a structural shift that is fundamentally changing the company’s manufacturing footprint and workforce requirements globally.
The restructuring comes as BAT contends with a dual pressure: declining volumes in its core cigarette business and the capital investment required to build scale in next-generation nicotine products in a competitive and rapidly evolving market.
This is coming years after British American Tobacco was hit by N10.6 trillion lawsuits in Nigeria on smoking-related illnesses.
In April 2024, British American Tobacco was facing legal claims amounting to N10.6 trillion (£9.3 billion) from the Nigerian government and five states over alleged healthcare costs associated with smoking-related illnesses.
The lawsuits, filed by the federal government alongside Kano, Oyo, Lagos, Ogun, and Gombe states, date back to 2007 and accuse the tobacco company of negligence, fraud, and other alleged violations linked to the production, marketing, and distribution of tobacco products.
