British American Tobacco cost cutting hits 9,000 roles
Overview of British American Tobacco's Workforce Reduction
AI-Driven Transformation and Cost-Cutting Measures
June 29 (Reuters) - British American Tobacco said on Monday it plans to reduce its workforce by about 20%, as it pushes ahead with an AI-driven transformation program to cut costs and bolster profits amid regulatory challenges and delayed launches.
Details of Job Cuts and Outsourcing
The tobacco giant said it would cut 5,500 jobs and move a further 3,500 roles to third-party firms, including Accenture, impacting a total of 9,000 employees. The restructuring does not include the U.S., its biggest market.
Financial Impact and Savings Targets
The cost-saving programme is expected to add £600 million ($793 million) worth of annualised incremental savings by 2028, with £500 million already targeted by 2027.
Regulatory Challenges and Market Impact
Delays in Product Launches
Sales in the Lucky Strike and Dunhill cigarette maker's largest market have been constrained by a requirement that manufacturers of new nicotine products like the company's Vuse vapes or Velo nicotine pouches obtain a licence from regulators, a lengthy process that has delayed product launches.
Previous Productivity Programme Announcements
The company previously signalled in February that its new productivity programme could lead to job cuts and in June, it kept its group-wide guidance unchanged.
Employee Consultations and Compliance
BAT on Monday said that most of the role changes had now been confirmed with employees, with remaining consultations being carried out in compliance with local requirements.
(Reporting by Yamini Kalia in Bengaluru; Editing by Nivedita Bhattacharjee and Thomas Derpinghaus)
