BAT Restructures, Cuts Jobs
BAT cuts 9,000 jobs, restructures globally amid shift to smoke-free products
Key Points
Regulators’ licensing requirements for new nicotine products (such as Vuse vapes and Velo nicotine pouches) have been delaying product launches in BAT’s key markets, contributing to the slow rollout amid the restructuring.
BAT aims to derive more than half of its total revenue from non-combustible products by 2028, signaling a dramatic pivot away from traditional cigarettes.
The restructuring expands outsourcing to third-party firms to run services, with ongoing partnerships including Accenture and Systems Ltd as part of the AI-driven transformation.
BAT remains a major global player with a broad portfolio, selling 465 billion cigarettes in 2025 and listing brands such as Dunhill, Kent, Pall Mall, Lucky Strike, and Rothmans, alongside next-generation products like Vuse and Glo.
British American Tobacco announced on June 29, 2026 that it will cut roughly 9,000 jobs — about 20% of its workforce outside the United States — as part of a sweeping restructuring driven by artificial intelligence. The company will eliminate 5,500 roles directly and outsource another 3,500 to partners including Accenture, targeting £600 million in annual savings by 2028, according to Yahoo Finance.
CEO Tadeu Marroco said BAT is "building a future-ready organisation that is more agile, cost disciplined and technology enabled." The overhaul comes as the company races to shift away from traditional cigarettes toward vapes and nicotine pouches — and needs cash to fund that pivot.
AI and Outsourcing Replace One in Five Workers
BAT's restructuring plan, called "Fit2Win," splits the 9,000 job changes into two buckets. Around 5,500 roles will simply be eliminated. Another 3,500 will move to outside firms. Accenture is the biggest partner, absorbing roles across the UK, Singapore, Poland, Romania, Mexico, and Malaysia. A Pakistani tech firm, Systems Ltd, will handle operations in South Asia, according to Yahoo Finance.
The savings ramp up quickly. BAT expects £500 million in annual cuts by 2027 and £600 million — roughly $793 million — by 2028. The company's 2025 revenue was £25.6 billion, down 1% from the year before. Its new-category products like Vuse vapes brought in £3.62 billion in 2025, up 5.5%, but that still leaves a massive gap to fill.
BAT Bets Its Future on Vapes and Nicotine Pouches
BAT still sold 465 billion cigarettes in 2025 under brands like Dunhill, Pall Mall, Lucky Strike, and Rothmans. But cigarette volumes fall industry-wide at about 2% every year. To survive, the company wants more than half of its total revenue to come from non-combustible products — things like Vuse vapes and Velo nicotine pouches — by 2028, according to Yahoo Finance.
Getting there is proving slow. Regulators in key markets require new licenses before BAT can launch next-generation nicotine products. Those delays have pushed the company to cut costs now so it can fund the expensive transition later. BAT aims to be a "predominantly smokeless" business by 2035 under its "A Better Tomorrow" strategy.
South Africa Plant Closure Shows the Human Cost
BAT's Heidelberg factory in South Africa — open since 1975 — will shut by the end of 2026, cutting 230 direct jobs. The company blames illegal cigarettes, which now make up roughly 75% of South Africa's market, making local production unviable. The National Union of Metalworkers (NUMSA) and local leaders warn the closure could hurt up to 35,000 people tied to the tobacco supply chain, including small farmers.
BAT's head of corporate affairs in Sub-Saharan Africa, Johnny Moloto, pointed to "policy failures and weak enforcement" on illicit trade as the root cause. The factory closure is part of a wider shift by BAT toward importing products rather than making them locally in markets where illegal competition is severe.
Markets Dip; Critics Say Workers Pay the Price
BAT shares on the London Stock Exchange fell about 1.28% after the announcement. Analysts said the £600 million savings target is good for long-term profit margins, but the scale of the cuts signals how badly the traditional cigarette business is struggling. Some warned that leaning too heavily on AI for supply chain operations could create new logistical risks.
Unions in affected regions pushed back hard. Workers argue that BAT is using AI and illicit trade as cover for slashing costs and shifting jobs offshore to cheaper locations like Bengaluru and Lahore. Public health advocates add a different critique — even as BAT cuts cigarette jobs, it keeps selling hundreds of billions of cigarettes while marketing new addictive products to younger consumers. The U.S. workforce, under Reynolds American, is not affected by the restructuring.
Sentiment
Mostly NegativePublishers
53
Articles
226
Reach
279
