British American Tobacco (BAT), the FTSE 100 behemoth behind iconic brands like Lucky Strike and Vuse vapes, is embarking on a radical overhaul of its operations. The company plans to slash a staggering 9,000 jobs globally by the end of this year, representing an eye-watering 19% of its global workforce outside of the US. This seismic shift is being driven by the increasing adoption of artificial intelligence (AI) and evolving business models.
The restructuring effort, dubbed "Fit2Win" and launched in 2025, aims to simplify BAT's operations and generate substantial cost savings. The company has formed strategic partnerships with technology giants like Accenture and ITC Infotech to facilitate these changes, with jobs from its global service hubs and supply operations being transferred to these partners.
BAT's chief executive, Tadeu Marroco, has stated that the goal is to create a "simpler, faster BAT" through strategic partnerships and a more focused operational footprint. The company predicts it will achieve approximately £600 million in annual cost savings by 2028, despite facing a challenging market environment where global industry-wide cigarette volumes are expected to decline by 2.5% by 2026.
The impact of such large-scale job reductions is considerable, particularly in the context of broader economic trends. Russ Mould, investment director at AJ Bell, noted that the scale of cutbacks signals a worrying trend for the labour market as major investments in technology continue to prompt significant headcount reductions in global companies striving for greater efficiencies.
For investors, BAT has historically been known as a major dividend payer, offering an average yield of 6.6% over the last decade. Following the announcement, BAT shares dipped 1.7% to 4,670p, highlighting concerns about the company's restructuring plans. With a market capitalisation of approximately £101 billion, BAT remains one of the largest companies on the FTSE 100.
The job losses are already underway in locations such as Costa Rica, Mexico, Poland, Romania, and Malaysia, with digital and technology roles transitioning to ITC Infotech.