British American Tobacco (BAT) is preparing to cut around 9,000 jobs globally as it reshapes its business for a future where fewer people are smoking traditional cigarettes, reported Bloomberg.
The move is part of the company’s wider plan to reduce costs while investing more in smoke-free products such as vaping devices and nicotine pouches. According to the report, the restructuring is among the biggest changes the tobacco giant has undertaken in recent years.
The planned workforce reduction will affect nearly one-fifth of BAT’s employees outside its US business. The company currently employs around 47,000 people across its international operations.
As part of the restructuring, about 5,500 roles are expected to be eliminated, while another 3,500 jobs will be outsourced before the end of this year. The company is expected to share more details with investors during its upcoming strategy update.
The cost-cutting programme is aimed at helping BAT save £600 million annually by the end of 2028.
The latest changes reflect a major shift taking place across the tobacco industry.
As cigarette sales continue to fall in many countries, tobacco companies are increasingly focusing on products that do not involve burning tobacco. BAT has been expanding its portfolio of smoke-free products, including its Vuse vaping devices and Velo nicotine pouches.
The company wants more than half of its future revenue to come from these newer products. This strategy is similar to the approach being followed by several global tobacco companies as they respond to changing consumer habits.
Earlier this year, BAT also estimated that global cigarette sales volumes would decline by around 2% in 2026, underlining the steady fall in demand for conventional tobacco products.
The job cuts are only one part of BAT’s broader restructuring plan.
Earlier this year, the company announced the closure of its cigarette manufacturing plant in South Africa, saying illegal tobacco trade had made operations increasingly difficult.
BAT is also relying more on automation, artificial intelligence and data analytics to improve efficiency. These technologies are expected to reduce the need for certain roles while allowing the company to streamline operations across different markets.
The company believes a large share of its planned cost savings will be achieved over the next two years through these measures.
Alongside job reductions, BAT has been expanding its outsourcing operations.
The company has transferred several support functions to global consulting firm Accenture. These include service centres in countries such as the UK, Singapore, Costa Rica, Mexico, Poland, Romania and Malaysia, the report mentioned.
Some technology-related operations in Pakistan have also been outsourced to local IT company Systems Ltd.
The outsourcing strategy is designed to simplify operations while allowing BAT to focus more resources on developing its next generation of nicotine products.
The restructuring highlights how quickly the global tobacco industry is evolving.
For decades, cigarette sales formed the backbone of companies such as BAT. Today, however, stricter regulations, greater health awareness and changing consumer preferences are reducing demand for traditional tobacco products.
As a result, tobacco companies are investing heavily in alternative nicotine products while trimming costs and redesigning their businesses for long-term growth.
For BAT, the latest round of job cuts marks another significant step in that transformation, even as it seeks to balance cost savings with continued investment in products it believes will drive future growth.