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British American Tobacco (BAT) has announced plans to eliminate around 9,000 jobs worldwide as part of a major restructuring strategy aimed at reducing costs and modernising its operations.
The tobacco company, known for brands such as Lucky Strike and Dunhill, will cut 5,500 positions while outsourcing another 3,500 roles. BAT has not disclosed which regions will be affected but confirmed that its operations in the United States will remain untouched.
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Earlier this year, the company revealed plans to become more digitally driven and integrate artificial intelligence into its business as part of a broader transformation strategy.
The move comes as demand for traditional cigarettes continues to decline, with more consumers opting for alternatives such as vaping devices and nicotine pouches.
BAT has increasingly shifted its focus to products like Vuse e-cigarettes and Velo nicotine pouches in an effort to boost growth. However, the company has struggled with slow sales and weaker profit margins in recent years.
The firm employs approximately 47,000 people globally and expects the restructuring to generate annual savings of about £600 million by 2028.
In its largest market, the United States, BAT has also faced declining sales as inflation and the rising cost of living push smokers toward cheaper cigarette brands.
The company is also contending with higher taxes, stricter tobacco regulations, and delays in the approval of new vaping products by U.S. regulators. BAT argues that these delays have encouraged the spread of illegal vaping products from China, negatively impacting its sales and market share.
Market analyst Dan Coatsworth of AJ Bell said the tobacco industry’s transition from traditional cigarettes to next-generation nicotine products has been slower than expected, despite vaping becoming increasingly popular. He noted that manufacturers continue to face stiff competition from illegal products flooding the market.
BAT said the workforce reduction is already underway and is expected to be completed before the end of the year.
Chief Executive Tadeu Marroco said the restructuring will make the company more flexible, technologically advanced, and financially efficient. He added that BAT is committed to supporting employees affected by the changes while positioning the business for long-term growth.
