Finance
Bat Signals Possible Job Cuts From AI Plan as Velo Nicotine Pouch Boosts Profit
Published by Global Banking & Finance Review®
Posted on February 12, 2026
3 min readLast updated: February 12, 2026
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BAT's profit increased by 2.3% as Velo expanded its US market share, boosting sales of new tobacco products.
BAT's AI Initiative May Lead to Job Reductions Amid Rising Velo Profits
Impact of AI on BAT's Workforce and Profits
By Emma Rumney and Shashwat Awasthi
Velo's Market Performance
Feb 12 (Reuters) - British American Tobacco announced a new AI-driven productivity programme expected to lead to job cuts on Thursday, while reporting higher annual profit as its Velo nicotine pouch gained U.S. market share and sales of newer products picked up.
Future Growth Expectations
The interim finance chief, Javed Iqbal, said the programme would see BAT, which sells cigarettes, tobacco and other nicotine products, simplify and automate using data analytics and AI tools, adding it would affect staffing levels.
Regulatory Challenges
It "will have an impact on the size of the organisation," he said on a call, adding it was too early to say how much of the workforce would be affected.
The productivity drive comes as Velo is winning market share from Philip Morris' Zyn and Altria's label On! in the key U.S. market, due to distinguishing features such as higher nicotine strengths and lower pricing.
"We are extremely encouraged by the U.S. performance of Velo," CEO Tadeu Marroco said on the call. "There is still plenty of opportunity for Velo to carry on growing."
BAT shares, which surged 46% last year, were little changed in morning trading, after earlier slipping 2%.
VELO AND VUSE KEY TO GROWTH
Velo now holds the second-highest market share in the U.S., behind Philip Morris' Zyn, and helped BAT report double-digit growth in sales of new products in the second half and a 5.5% rise in U.S. revenue in 2025.
It is part of a suite of newer products which includes its Vuse vape and heated tobacco, in which BAT is investing heavily to spur growth, though some analysts warn this may drag on margins.
CEO Marroco said regulators' efforts to crack down on a booming market for unregulated vapes had helped sales of BAT's own licensed device and could reduce pressure on cigarette sales.
Still, it would take time for regulators' efforts to have an impact in the "very entrenched" market, and BAT expected to have a flat performance in its U.S. vape business in 2026, he said.
BAT reiterated its aim of hitting the lower end of its medium-term revenue growth targets of 3% to 5% and 4% to 6% adjusted operating profit growth in 2026.
($1 = 0.7344 pounds)
(Reporting by Shashwat Awasthi and Nithyashree R B in Bengaluru, Emma Rumney in London; Editing by Janane Venkatraman, Joe Bavier and Bernadette Baum)
Key Takeaways
- •BAT's annual profit rose by 2.3% to 11.28 billion pounds.
- •Velo nicotine pouches gained market share in the US.
- •Sales of newer vapes and heated tobacco products grew.
- •Revenue from new products increased by 7%.
- •Total sales rose by 2.1% to 25.61 billion pounds.
Frequently Asked Questions about BAT signals possible job cuts from AI plan as Velo nicotine pouch boosts profit
1What are vapes?
Vapes, or e-cigarettes, are devices that vaporize a liquid solution containing nicotine, flavorings, and other chemicals for inhalation. They are often used as an alternative to traditional smoking.
2What is market share?
Market share is the portion of a market controlled by a particular company or product. It is typically expressed as a percentage of total sales in the market.
3What are heated tobacco products?
Heated tobacco products are devices that heat tobacco to release nicotine and flavor without burning it. They are marketed as a less harmful alternative to traditional cigarettes.
