British American Tobacco (BAT) has announced plans to eliminate 5,500 jobs across its global operations while outsourcing an additional 3,500 positions as part of a major restructuring programme aimed at reducing operational costs.
The company, known for producing cigarette brands such as Lucky Strike and Dunhill, disclosed on Monday that the restructuring is expected to generate annual savings of £600 million ($792 million) by 2028. The move will affect about 20 percent of BAT's global workforce of approximately 47,000 employees.
According to DIP CONNECT ONLINE NEWS, the tobacco giant is responding to the continued decline in demand for traditional cigarettes by shifting its focus toward next-generation nicotine products, including vaping devices and oral nicotine products.
Commenting on the restructuring, BAT Chief Executive Officer, Tadeu Marroco, said the company is repositioning itself for long-term growth.
"We are building a future-ready organisation that is more agile, cost disciplined and technology enabled," Marroco said.
He acknowledged the impact of the decision on employees, adding, "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."
The announced job reductions will affect BAT's operations worldwide, with the exception of the United States, the company's largest market, where its business is managed through its subsidiary, Reynolds American.
Following the announcement, BAT shares fell by 1.5 percent on the London Stock Exchange, while the benchmark FTSE 100 Index was down by 0.2 percent.
Reacting to the development, AJ Bell Investment Director, Russ Mould, said the company is among several major businesses increasingly relying on technology to improve efficiency and accelerate product development.
"British American Tobacco is the latest name to ramp up the use of technology to help its business run more smoothly and be able to launch new products faster," Mould said.
He added that the scale of the workforce reduction reflects broader trends affecting the global labour market.
"The scale of cutbacks is a sign of the times, and the trend is worrying for the state of the labour market," he noted.
AFD
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