Tadeu Marroco is firing nine thousand people and calling it artificial intelligence.
British American Tobacco announced this week that the company will cut 5,500 jobs by year’s end and outsource a further 3,500, mostly to Accenture. The total — about a fifth of BAT’s 47,000-strong workforce — is being presented, in the company’s own press release, as part of a “transformation programme” that will leave it “more agile, cost disciplined and technology enabled.” The technology in question, per a partnership announced last year, is Accenture’s “advanced AI solutions.” The cost savings are £600 million annually by the end of 2028. The nine thousand people losing their livelihoods are being supported, the company assures us, “with care and respect.”
It is true that British American Tobacco has a structural problem, in the narrow sense in which a century-old cigarette manufacturer can be said to have anything else. Global cigarette volumes are predicted to fall by another 2.5 per cent this year; the core product is in terminal decline, and the company’s pivot to “new categories” — Vuse vapes, Velo nicotine pouches — is an admission that the old categories are running out of customers. The trouble is that pivoting a global supply chain from combustible tobacco to aerosolized nicotine is a matter of manufacturing, logistics, and regulatory compliance. It is not a matter of deploying “advanced AI solutions” through a consultancy contract.
To be precise about what “the algorithm” actually is, because the public discourse has the misleading habit of treating it as a thing rather than a continually-tuned set of weights serving a continually-revised objective function: at BAT, as at most of the large companies that have announced “AI transformations” over the past eighteen months, the algorithm is, in the first instance, a spreadsheet. It is the headcount model, run by the chief financial officer’s office, in consultation with the consulting partner, on a per-function basis, with each function’s “AI exposure” scored against a benchmark. The benchmark is a number supplied by the consulting partner. The consulting partner is being paid, partly, on the size of the cost reduction. To say that the algorithm decided is, at the level of the prose, a misstatement on the order of “the algorithm decided to outsource my job to a man in Bucharest.” The algorithm did not decide. The board decided. The algorithm was the post-hoc rationalisation.
Cory Doctorow has observed that an AI cannot actually do your job, but an AI salesman can convince your boss to fire you and replace you with an AI that cannot. Marroco’s “technology enabled” framing is the exact instrument of that labour discipline. The pattern has been visible, in nearly identical form, across the AI-layoffs stream in this publication’s coverage of Cisco, Meta, and a long list of others, and it has now bled into foodservice retail, where Starbucks cited similar transformation pressures to lay off 300 corporate workers. The script is not, in the relevant sense, an AI script. It is a layoff script with an AI prologue. The AI is the part the press release is willing to talk about. The layoffs are the part the press release is required to disclose. The two are presented, in the script, as cause and effect. They are, on the documentary record, the same thing in different costumes.
This is enshittification, in Doctorow’s four-stage sense: good to users, then good to business customers, then value extracted from both for shareholders, then collapse. The mechanism that has historically limited the speed of the extraction is the four forces — competition, regulation, self-help interoperability, and labour. For a tobacco multinational in 2026, none of the four is operative. There is no competition for BAT’s customers at the bottom of the market, because the customers are addicted and the suppliers are few. There is no regulation that limits the size of a single year’s restructuring. There is no interoperability angle, because these are not software products, however much the press release wants them to be. And there is no labour leverage, because the labour force is dispersed across seven countries and the works councils in the relevant jurisdictions are not coordinated.
A worker in Bucharest, doing the same work as a worker in London, at a fraction of the cost, has no way to coordinate with the worker in London. The worker in London is being fired. The worker in Bucharest is being hired, by Accenture, at the new rate. The two are not, in any sense that matters for collective bargaining, on the same side. The four forces are not just weakened in the BAT case. They are, in the structural sense, absent.
Cui bono. The £600 million in annual savings, if they are realised, will not go to the workers being fired. They will not go to the workers being hired by Accenture at the new rate. They will not, in any meaningful portion, go to consumers, who are addicted and price-inelastic. They will go to operating margin, which goes to earnings, which goes to the share price, which goes to the executives whose compensation is tied to that share price. The executives are the ones to whom the press release attributes the “transformation.” The workers, whose actual work the transformation is built on, will receive severance, in the legal minimum amount, and be invited to apply for jobs at the consulting firm that has just been hired to do the work they used to do. BAT, which told investors four weeks ago that revenue growth in “new categories” was accelerating, is in the unusual position of being able to claim, in the same earnings cycle, both that the vape business is going to save the company and that nine thousand of the people who work at the company are no longer required.
There is an American exception, and it is the exception that proves the rule. Reynolds American, BAT’s US subsidiary, is held entirely harmless from the cuts — not because its workers are cheaper to keep, but because the consulting-arbitrage model Accenture runs requires a meaningful wage differential between the country losing the work and the country receiving it. The United Kingdom sends work to Romania. The United States does not send work to Romania, because the work at Reynolds is, in the consulting arithmetic, already cheaper to keep where it sits. The exemption is a non-decision. There is, in any case, a separate operational structure under RAI, with union contracts and a WARN-Act severance arithmetic that make the calculus of a comparable outsourcing materially different. Cui bono, with the country switched.
The mechanism is new. The playbook is the inheritance of extraction, older than the mechanism: the playbook of every leveraged-buyout operator who acquired a heavy-industry asset in the developed world since the mid-nineties, of every consulting engagement ever sold on the promise of productivity gains that would be shared with the workers, of every quarterly earnings call at which the word “transformation” has been used to describe a headcount reduction. The consulting partner changes. The software changes. The country to which the work is being sent changes. The share price goes up. The workers are fired. The press release says “AI.” The work is, in the technical sense that matters to the workers being fired, the same work it has always been. Each link in the chain is, in the language of the relevant trade press, the future of work. Each link in the chain is, in the language of the mill floor, what my father would have called a speedup, when Gerdau bought the rolling mill at Selkirk in 1995. The durably installed constraint, where it has been built, is sectoral collective bargaining that follows the work rather than the country, antitrust attention to the consulting firms that have consolidated the market for “transformation services,” and a procurement standard for any AI-justified workforce reduction: the press release should publish the model, the training data, the failure modes, and the actual proportion of the work that will be done by software rather than by workers in lower-cost jurisdictions. The press release should be a procurement document, written in the language of an engineering document.
The arrangement, in the language of the consulting firm being paid to facilitate it, is the future of work. In the language of the workers who have been through it before, it is Tuesday. The £600 million in annual savings British American Tobacco expects to realise by 2028 is not generated by a neural network. It is generated by not paying nine thousand people their wages. The only thing being transformed is the name on the pink slip.