BRITISH AMERICAN TOBACCO TO CUT 5,500 JOBS IN AI OVERHAUL

British American Tobacco announced on Monday that it plans to reduce its workforce by approximately 20% as part of an artificial intelligence-driven transformation programme. The company will cut 5,500 jobs and relocate a further 3,500 roles to third-party firms, including Accenture, affecting a combined total of 9,000 employees. The restructuring will not extend to the United States, BAT's largest market. Chief Executive Tadeu Marroco stated that the changes would make the company "more agile, cost-disciplined and technology-enabled" whilst committing to support affected staff.

The cost-saving programme is expected to generate £600 million in annualised incremental savings by 2028, with £500 million targeted by 2027. BAT's sales and profit growth have underperformed in recent years, with the company's traditional tobacco division facing predicted global industry-wide decline of 2.5% this year. The company is pivoting towards smoking alternatives including its Vuse vapes and Velo nicotine pouches, though it has lagged behind competitor Philip Morris International. The U.S. market has been particularly challenging, with regulatory delays hampering product launches and contributing to market share losses.

BAT has faced additional headwinds including shifting consumer demand towards cheaper brands, rising duties, stricter regulations and illicit trade in markets such as Australia and Bangladesh. The company previously signalled in February that its productivity programme could result in job cuts. Pallav Mittal, analyst at Barclays, suggested the scale of the "broad-based" reductions could surprise investors, though BAT maintained its group-wide guidance in June.