British-American Tobacco Company Plans to Lay Off 5,500 Employees This Year as Smoking Declines
BAT is cutting 5,500 jobs—about a fifth of its workforce—by year-end as cigarette demand declines and the company shifts investment toward smoke-free nicotine alternatives like e-cigarettes and pouches.
British-American Tobacco (BAT), the English-American cigarette manufacturer and distributor of brands including Dunhill, Kent, and Rothmans, is preparing to lay off 5,500 positions—or one-fifth of its approximately 47,000 global workforce—as part of a major organizational restructuring aimed at reducing costs and improving operational efficiency.
According to Bloomberg, citing an internal BAT announcement, the company will lay off 5,500 employees by year-end while outsourcing 3,500 positions. BAT has partnered with Accenture to manage multiple business functions, including service centers that typically employ large numbers of staff. Positions in the United Kingdom, Singapore, Costa Rica, Mexico, Poland, Romania, and Malaysia have already been transferred to Accenture, while some operations in Pakistan have been outsourced to Systems Ltd, a Pakistani technology and business services company.
The reported layoff figures do not include BAT's U.S. operations, which operate through subsidiary Reynolds American. BAT faces declining demand for traditional cigarettes in many global markets while needing to invest in alternative nicotine products that are gaining consumer popularity as more smokers seek to quit. Like competitor Philip Morris International, BAT aims to generate more than half its revenue from smoke-free nicotine products such as the Vuse e-cigarette and Velo nicotine pouches.
The restructuring also involves closing traditional cigarette manufacturing plants. In January, BAT announced it had closed its eighth cigarette factory in South Africa due to illegal trade competition. The company forecasts a 2 percent decline in global cigarette industry volume this year. BAT's Chief Financial Officer Javed Iqbal stated in February that artificial intelligence and data analytics tools will also impact staffing levels. The company expects to complete most of its cost-reduction plan, valued at approximately 500 million pounds, within the coming year.
