British American Tobacco plans 9,000 job cuts this year as AI drive reshapes global cigarette business

29 June, 2026
British American Tobacco plans 9,000 job cuts this year as AI drive reshapes global cigarette business

Winning Bizness Desk

Mumbai.British American Tobacco (BAT), one of the world's largest tobacco companies, has announced plans to cut around 9,000 jobs this year as part of a major transformation aimed at reducing costs, embracing artificial intelligence (AI) and accelerating its shift towards technology-led operations. The London-headquartered company said the move comes as demand for traditional cigarettes continues to decline worldwide while consumers increasingly switch to alternative nicotine products such as vapes and nicotine pouches.

Cost-cutting and AI-led transformation

The company employs around 47,000 people globally and said nearly one-fifth of its workforce will be affected through a combination of job eliminations and outsourcing. BAT plans to eliminate 5,500 positions by the end of 2026 while another 3,500 roles will be outsourced, taking the total number of impacted employees to about 9,000.

Key highlights of the restructuring include:

  • 5,500 jobs to be eliminated by the end of this year.
  • 3,500 additional positions to be outsourced.
  • Around 9,000 employees expected to be affected.
  • Annual savings target of £600 million by the end of 2028.

The FTSE 100-listed company said the restructuring is part of its long-term transformation programme designed to make the business leaner, faster and more technology-enabled. BAT, known for cigarette brands such as Dunhill and Peter Stuyvesant, expects the overhaul to significantly improve operational efficiency while strengthening its ability to compete in a rapidly changing nicotine market.

CEO outlines future-ready strategy

BAT Chief Executive Officer Tadeu Marroco said the company is building a future-ready organisation that is more agile, disciplined on costs and enabled by technology. He acknowledged that many employees would be affected by the restructuring but said the company remains committed to supporting them with care and respect throughout the transition.

Important developments include:

  • BAT says employee support will remain a priority during the transition.
  • The company is investing heavily in technology-enabled operations.
  • AI is expected to play a larger role in improving productivity and business processes.

The restructuring reflects broader changes taking place across the global tobacco industry as manufacturers increasingly invest in smoke-free products while reducing dependence on conventional cigarette sales.

No US layoffs as Accenture expands role

BAT clarified that there will be no layoffs in its US operations, where it conducts business through Reynolds American. Instead, much of the restructuring will take place across international markets.

The company had partnered with technology consulting giant Accenture last year to outsource selected business functions. At the time, Marroco said the partnership would provide BAT access to Accenture's advanced AI capabilities.

Following the agreement, several jobs across the United Kingdom, Poland, Romania, Costa Rica, Mexico, Singapore and Malaysia have already been transferred to Accenture as part of the outsourcing programme.

Digital focus grows as cigarette demand weakens

Earlier this year, interim Finance Chief Javed Iqbal told the Financial Times that BAT's simplification strategy would make the organisation more digital and AI-focused. The company has also begun shutting down some of its traditional cigarette manufacturing facilities as global cigarette consumption continues to weaken.

Among recent developments:

  • BAT announced the closure of its eighth-largest factory in South Africa in January.
  • The decision was linked to intense competition from illegal tobacco trade.
  • The company continues to streamline manufacturing operations globally.

Industry volumes continue to decline

BAT estimates that global cigarette industry volumes will decline by around 2.5% this year. As a result, the company is accelerating investments in smoke-free alternatives, including Vuse vaping products and Velo nicotine pouches.

The company recently informed investors that revenue from its "New Categories" business is growing faster than its traditional cigarette segment and is expected to rise by around 15% this year.

The restructuring announcement also affected investor sentiment. BAT shares slipped around 1.4% during early Monday trading, although the stock remains nearly 11.8% higher for the year. Shares of rival Imperial Brands also declined by about 1% in early trade.

What FTSE 100 and outsourcing mean

  • FTSE 100 is the benchmark index tracking the 100 largest companies listed on the London Stock Exchange by market capitalisation, similar to India's Sensex and Nifty.
  • Outsourcing refers to assigning business operations or internal processes to an external specialist company, helping businesses reduce costs while gaining access to advanced technologies such as AI.