British American Tobacco to cut 9,000 jobs in AI and cost-saving drive

British American Tobacco (BAT) is axing nearly a fifth of its global workforce — cutting 5,500 roles and outsourcing 3,500 more — as the cigarette maker pivots to artificial intelligence and tries to revive sluggish sales. The job losses, which have already begun, are set to be completed by the end of this year. BAT, which employs about 47,000 people globally, said the US operations are not affected. The company did not specify where the cuts will fall elsewhere. The cull comes as traditional cigarette sales shrink, with smokers increasingly switching to vapes and nicotine pouches. BAT has been trying to pivot to alternatives such as its Vuse vapes and Velo nicotine pouches, but sales and profit margins have been slow. The cost-cutting programme, announced earlier this year, is expected to save about £600m a year by 2028 and positions the company to be "more digital and AI-focused". Yet the shift has been hampered by a tough market. In the US — BAT's biggest market — the cost of living crisis has pushed smokers towards cheaper brands, while American regulators have taken a hard line on approving licences for new products, delaying launches. The company says this has fuelled a flood of illegal Chinese products, eroding its market share. "The tobacco industry has found the transition from cigarettes to next-generation products to be a slow one," said Dan Coatsworth, head of markets at AJ Bell. "Vaping is now commonplace, yet product manufacturers are battling challenging market conditions caused by a proliferation of illegal products." BAT chief executive Tadeu Marroco said the cuts would make the company "more agile, cost disciplined and technology enabled". "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," he added. The maker of Lucky Strike and Dunhill cigarettes is the latest traditional tobacco firm to restructure as vaping reshapes the industry. But with regulatory hurdles and a flood of illicit products, the road to a smoke-free future remains uncertain.