BAT, which makes Dunhill, Lucky Strike and Peter Stuyvesant cigarettes, said the 5,500 direct job reductions will take place by the end of this year. An additional 3,500 roles have been transferred to Accenture as part of a technology outsourcing partnership the companies announced last year.
Chief Executive Tadeu Marroco said the company was “building a future-ready organisation that is more agile, cost disciplined and technology enabled.” Asked about the impact on employees, 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.”
No job cuts are planned at BAT’s US subsidiary, Reynolds American, the company said. The US business operates independently from the global restructuring.
The affected roles span BAT’s supply network operations in the UK and Singapore, as well as global service hubs in Costa Rica, Mexico, Poland, Romania and Malaysia. The company said those positions have been absorbed by Accenture since the deal was signed. Last year BAT partnered with Accenture to outsource some functions, with Marroco saying at the time the arrangement would give the company access to “advanced AI solutions.”
BAT has also been consolidating its factory network. In January it announced the closure of its Heidelberg plant in South Africa, its eighth largest factory, citing competition from illicit trade. The operational changes are part of a restructuring program launched last year targeting about £600 million in annual cost savings by 2028, the company said.
The job cuts come as BAT faces weakening demand for traditional cigarettes. The company predicted in early June that global cigarette industry volumes would fall about 2.5% this year. At the same time, BAT has been increasing investment in smoke-free alternatives such as Vuse vaping devices and Velo nicotine pouches. It told investors earlier this month that revenue growth in its “new categories” segment was accelerating and that it expected mid-teen percentage growth this year.
In February, BAT interim finance chief Javed Iqbal told the Financial Times that the company’s plans to simplify operations would make it “more digital and AI-focused.”
Shares in BAT fell about 1.4% in early trading Monday on the London Stock Exchange. They remain up about 11.8% for the year to date. Shares in rival Imperial Brands also fell about 1% in early trading.