British American Tobacco (BAT) is set to cut 9,000 jobs globally, representing nearly 20% of its workforce. This drastic move is part of a broader strategy to adapt to declining demand for traditional cigarettes, as more consumers turn to vaping and nicotine alternatives. The cuts include 5,500 direct job losses and the outsourcing of 3,500 roles, with the company aiming to save approximately £600 million annually by 2028.
The job reductions come as BAT grapples with sluggish sales and profit margins, particularly in its largest market, the US. Here, rising living costs have led smokers to opt for cheaper brands, further impacting BAT’s revenue. The company is shifting its focus towards digital and AI-driven products, such as Vuse vapes and Velo nicotine pouches, to drive future growth.
These changes reflect a significant transformation in the tobacco industry, where traditional cigarette sales are in decline. BAT’s CEO, Tadeu Marroco, emphasised the need for the company to become more agile and cost-disciplined in response to market pressures. The job cuts are expected to be completed by the end of the year, with the company pledging to support affected employees during this transition.
As BAT pivots towards alternative products, the implications of these job cuts extend beyond the company itself, potentially affecting local economies and the broader job market in regions where these roles are based. The shift also highlights the ongoing evolution of consumer preferences in the tobacco sector, which may continue to reshape the industry landscape in the years to come.
Source: BBC News
