British American Tobacco (BAT) is preparing to eliminate approximately 9,000 jobs worldwide as part of a major restructuring effort aimed at adapting to a future where traditional cigarette consumption continues to decline, according to a Bloomberg report.
The planned overhaul forms part of the company's broader strategy to cut costs while increasing investment in smoke-free alternatives such as vaping products and nicotine pouches. The restructuring is being viewed as one of the most significant transformations undertaken by the tobacco giant in recent years.
Nearly 9,000 Jobs Affected
The proposed workforce reduction is expected to impact close to one-fifth of BAT's employees outside its United States operations. The company currently employs around 47,000 people across its international businesses.
Under the restructuring plan, approximately 5,500 positions are expected to be eliminated, while another 3,500 roles will be outsourced before the end of the year. BAT is expected to provide further details during its upcoming strategy presentation to investors.
The programme is intended to generate annual savings of £600 million by the end of 2028.
Shift Towards Smoke-Free Products
The restructuring reflects the broader transformation taking place across the global tobacco industry.
As cigarette consumption continues to decline in many markets, tobacco companies are increasingly focusing on products that do not involve burning tobacco. BAT has been expanding its portfolio of alternative nicotine products, including Vuse vaping devices and Velo nicotine pouches.
The company has set a goal of deriving more than half of its future revenue from these newer product categories. This approach mirrors similar strategies adopted by other major tobacco companies seeking to adapt to changing consumer preferences.
Earlier this year, BAT projected that global cigarette sales volumes would decline by around 2 per cent in 2026, highlighting the ongoing reduction in demand for conventional tobacco products.
Factory Closures and Technology-Driven Efficiency
The workforce reductions are part of a wider restructuring programme that extends beyond staffing changes.
Earlier in the year, BAT announced the closure of its cigarette manufacturing facility in South Africa, citing the growing impact of the illicit tobacco trade on business operations.
The company is also increasing its use of automation, artificial intelligence and data analytics to improve operational efficiency. These technologies are expected to reduce reliance on certain roles while helping streamline processes across multiple markets.
BAT expects a substantial portion of its targeted cost savings to be achieved over the next two years through these initiatives.
Growing Reliance on Outsourcing
Alongside job cuts, BAT has expanded its outsourcing strategy.
According to the Bloomberg report, the company has transferred several support functions to global consulting firm Accenture. These functions include operations at service centres located in the United Kingdom, Singapore, Costa Rica, Mexico, Poland, Romania and Malaysia.
In addition, certain technology-related operations in Pakistan have reportedly been outsourced to local IT company Systems Ltd.
The company believes that outsourcing will simplify its organisational structure and allow greater focus on the development and expansion of next-generation nicotine products.
Industry Undergoing Rapid Change
The restructuring underscores the speed at which the global tobacco sector is evolving.
For decades, cigarette sales formed the foundation of companies such as BAT. Today, however, stricter regulations, increasing health awareness and shifting consumer behaviour are steadily reducing demand for traditional tobacco products.
In response, tobacco companies are investing heavily in alternative nicotine products while simultaneously reducing costs and redesigning their business models for long-term sustainability.
For BAT, the planned workforce reduction represents another significant step in its transition towards a smoke-free future, as it attempts to balance operational efficiency with continued investment in emerging growth areas.
