British American Tobacco (BAT) is cutting nearly a fifth of its global workforce – 9,000 jobs in total – as the cigarette giant tries to reinvent itself for a world where fewer people smoke. The maker of Dunhill and Lucky Strike is shedding 5,500 roles and outsourcing 3,500 more, part of what it calls a “transformation programme” to become “more digital and AI-focused”. The cuts have already begun and are expected to be completed by the end of 2026.
BAT employs about 47,000 people worldwide. The job losses will not affect its US operations, where it trades through subsidiary Reynolds American, but the company has not confirmed where else the axe will fall. Chief executive Tadeu Marroco said the aim is to create a “more agile, cost disciplined and technology enabled” business, with annual savings of about £600m by 2028.
“Why BAT is cutting 9,000 jobs and pivoting to AI and vaping.”
The move reflects a stark reality: traditional cigarette sales are shrinking. Smokers are switching to vapes and nicotine pouches, and governments are tightening regulations and raising duties on tobacco products. BAT has been investing heavily in smoke-free alternatives such as Vuse vapes and Velo nicotine pouches, but the transition has been slow. “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. BAT’s sales and profit margins have been sluggish in recent years, and its US business has been hit by the cost-of-living crisis, with smokers trading down to cheaper brands. Meanwhile, American regulators have been slow to approve licences for new vaping products, which BAT says has allowed illegal Chinese products to flood the market.
For UK readers, BAT’s troubles matter because it is a FTSE 100 company headquartered in London. The job cuts could affect UK employees, though the company has not specified. More broadly, the story highlights how even the most traditional industries are being reshaped by technology and changing consumer habits. BAT has partnered with Accenture to outsource work and gain access to “advanced AI solutions”, and last year it closed its eighth-largest factory in South Africa because of competition from illicit trade. The company predicts global cigarette volumes will fall by about 2.5% this year.
Q: Why is British American Tobacco cutting jobs? A: BAT is cutting costs and shifting focus away from traditional cigarettes, which are in long-term decline, towards smoke-free products like vapes and nicotine pouches. The company also wants to become more digital and AI-focused, which means some roles are being outsourced to technology partners like Accenture.
Q: How many jobs are being cut and where? A: BAT is cutting 5,500 jobs and outsourcing a further 3,500, making 9,000 in total – about a fifth of its global workforce. The cuts are global but will not affect its US subsidiary, Reynolds American. Some jobs in the UK, Poland, Romania, Costa Rica, Mexico, Singapore and Malaysia have already been absorbed by Accenture.
Q: What does this mean for smokers and vapers? A: BAT is doubling down on vaping and nicotine pouches, so consumers may see more marketing and product development for brands like Vuse and Velo. However, the company faces regulatory hurdles, especially in the US, where illegal Chinese vapes are hurting its market share. In the UK, where vaping is already common, the shift could mean more choice but also continued debate over health and regulation.
What happens next? The job cuts are due to be completed by the end of 2026. BAT will focus on its smoke-free portfolio and cost savings, but it still faces headwinds from illicit trade, tough regulations and changing consumer habits. The company’s transformation is a bellwether for an industry trying to quit its dependence on cigarettes.