By the end of this year, the maker of Dunhill cigarettes will have slashed 5,500 jobs and outsourced a further 3,500, according to an internal notice that lays bare the scale of change taking place at the tobacco giant. The numbers, seen by Bloomberg News, do not include BAT’s US business, which is operated through its subsidiary Reynolds American Inc.
Most other countries in which BAT operates are affected by this ongoing restructuring programme, and the company will detail the extent of job cuts on Monday. It had pledged to make £600 million ($793 million) of annual cost savings by the end of 2028.
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Shares of BAT fell as much as 1.9% in London, trimming year-to-date gains. The stock was up nearly 13% since the start of the year through Friday’s close.
BAT is contending with falling demand for traditional cigarettes in many markets and a need to invest in and develop more sustainable nicotine alternatives, which have soared in popularity as people look for ways to quit smoking. Like its rival Philip Morris International Inc., BAT wants to generate more than half of its revenue from “smoke-free” nicotine products such as Vuse vapes and Velo nicotine pouches.
Part of BAT’s restructuring has involved closing traditional cigarette factories. In January, the company said it would shut its eighth-largest cigarette factory, located in South Africa, due to competition from illicit trade. Earlier this year, BAT forecast a decline in global cigarette industry volumes of 2% in 2026.
Interim Chief Financial Officer Javed Iqbal said in February that the use of artificial intelligence and data analytics tools would also affect staffing levels. Most of BAT’s planned cost savings, about £500 million, would be delivered by 2027, he said.
BAT has partnered with Accenture to outsource several functions, including service centres, which typically employ large proportions of companies’ overall workforces. Certain roles in the UK, Singapore, Costa Rica, Mexico, Poland, Romania and Malaysia have since moved to Accenture, said BAT in its latest notice. Meanwhile, some roles in Pakistan have been outsourced to Systems Ltd., a Pakistani technology and business firm, it 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,” Chief Executive Officer Tadeu Marroco said in a statement.
