British American Tobacco is cutting nearly a fifth of its global workforce, axing 5,500 roles and outsourcing 3,500 more – part of a major cost‑cutting drive to make the cigarette giant “more digital and AI‑focused”.
The maker of Lucky Strike and Dunhill, which employs about 47,000 people worldwide, said the cuts have already started and should be completed by the end of the year. The US, its biggest market, is not affected.
“BAT cuts 9,000 jobs, nearly a fifth of its workforce, as it shifts to AI and vaping.”
The move comes as traditional cigarette sales shrink, with smokers switching to vapes and nicotine pouches. BAT is shifting its focus to alternatives such as Vuse vapes and Velo pouches, but sales and profit margins have been sluggish. The cost‑of‑living crisis in the US has also hit revenues, as smokers swap for cheaper brands.
Meanwhile, the company is battling rising duties, stricter regulations, and – it says – an influx of illegal Chinese products. American regulators have taken a tough stance on approving licences for new vaping products, delaying launches and fuelling the black market.
“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.”
Chief executive Tadeu Marroco said the cuts would make the company “more agile, cost disciplined and technology enabled”. He added: “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.”
BAT expects the cost savings to reach about £600m a year by 2028.