British American Tobacco said on Monday it plans to reduce its workforce by about 20%, as it pushes ahead with an AI-driven transformation programme to cut costs and bolster profits amid regulatory challenges and delayed launches.
The tobacco giant said it would cut 5,500 jobs and move a further 3,500 roles to third-party firms, including Accenture , impacting a total of 9,000 employees. The restructuring does not include the US, its biggest market.
The cost-saving programme is expected to add £600 million ($793 million) worth of annualised incremental savings by 2028, with £500 million already targeted by 2027.
Sales in the Lucky Strike and Dunhill cigarette maker’s largest market have been constrained by a requirement that manufacturers of new nicotine products like the company’s Vuse vapes or Velo nicotine pouches obtain a licence from regulators, a lengthy process that has delayed product launches.
The company previously signalled in February that its new productivity programme could lead to job cuts and in June, it kept its group-wide guidance unchanged.
BAT on Monday said that most of the role changes had now been confirmed with employees, with remaining consultations being carried out in compliance with local requirements.