BAT to cut 9,000 jobs globally as AI reshapes operations

British American Tobacco (BAT) will cut about 9,000 jobs globally this year as the tobacco giant, looks for ways to push down costs and become more “technology enabled”.

According to a report from Bloomberg, the London-listed company said it will eliminate 5,500 positions and outsource another 3,500 roles by the end of 2026, affecting nearly one-fifth of its global workforce of about 47,000 employees.

The restructuring is expected to generate annual cost savings of £600 million by the end of 2028 as BAT seeks to simplify its operations, increase efficiency and become more technology-driven.

Tadeu Marroco, the company’s chief executive, described the move as part of efforts to build a future-ready organisation capable of responding to changing consumer preferences and a rapidly evolving business environment.

“We are building a future-ready organisation that is more agile, cost-disciplined and technology-enabled,” Marroco said.

“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.”

The job reductions come as the world’s leading tobacco companies face sustained declines in traditional cigarette sales, tighter regulations and increasing competition from alternative nicotine products such as vaping devices and nicotine pouches.

BAT expects global cigarette consumption to decline by about 2.5 percent this year, extending a long-term trend that has forced major tobacco manufacturers to diversify beyond combustible products.

The company has been investing aggressively in new categories, including its Vuse vaping brand and Velo nicotine pouches, which management says are delivering faster revenue growth than its legacy cigarette business. BAT recently told investors it expects mid-teen percentage revenue growth from the segment in 2026.

The restructuring also reflects BAT’s growing reliance on artificial intelligence and digital technologies to improve productivity.

Last year, the company partnered with technology consultancy Accenture to outsource parts of its operations and gain access to advanced AI capabilities. Under the agreement, some roles across the United Kingdom, Poland, Romania, Costa Rica, Mexico, Singapore and Malaysia have already been transferred to Accenture.

BAT’s interim finance chief, Javed Iqbal, said earlier this year that the company’s simplification strategy would make the business “more digital and AI-focused.”

The company has also been rationalising its manufacturing footprint. In January, BAT announced plans to shut its eighth-largest cigarette factory in South Africa, citing mounting competition from the illicit tobacco trade and weakening demand.

Notably, the latest restructuring will not affect BAT’s operations in the United States, where it conducts business through its subsidiary, Reynolds American.

Investors reacted cautiously to the announcement. BAT shares fell about 1.4 percent in early Monday trading, although the stock remains nearly 12 percent higher since the start of the year. Shares of rival Imperial Brands also slipped by about 1 percent.