By the end of this year, the manufacturer of Dunhill cigarettes plans to eliminate 5,500 jobs and outsource another 3,500, based on an internal notice that outlines the magnitude of changes occurring within the tobacco company. The figures, reviewed by Bloomberg News, do not account for BAT’s US operations, which are managed through its subsidiary Reynolds American Inc.
The ongoing restructuring initiative will impact most countries where BAT operates, and the company will provide further details on job reductions this coming Monday. It has committed to achieving £600 million ($793 million) in annual cost savings by the end of 2028.
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In London, BAT’s shares dipped as much as 1.9%, diminishing year-to-date gains. The stock had risen nearly 13% since the beginning of the year up to Friday’s close.
BAT is facing declining demand for traditional cigarettes across many markets and must invest in developing more sustainable nicotine alternatives, which have become increasingly popular as individuals seek to quit smoking. Similar to its competitor Philip Morris International Inc., BAT aims to derive more than half of its revenue from “smoke-free” nicotine products like Vuse vapes and Velo nicotine pouches.
As part of its restructuring, BAT has begun closing traditional cigarette production facilities. In January, the company announced it would close its eighth-largest cigarette factory in South Africa, citing competition from illicit trade. Earlier this year, BAT projected a 2% decrease in global cigarette industry volumes by 2026.
Interim Chief Financial Officer Javed Iqbal indicated in February that the adoption of artificial intelligence and data analytics tools would also influence staffing levels. The majority of BAT’s anticipated cost savings—approximately £500 million—are expected to be realized by 2027, he noted.
BAT has teamed up with Accenture to outsource various functions, including service centers that typically represent a significant portion of companies’ overall employment. Roles in the UK, Singapore, Costa Rica, Mexico, Poland, Romania, and Malaysia have now transitioned to Accenture, according to BAT’s latest update. Additionally, some positions in Pakistan have been shifted to Systems Ltd., a Pakistani technology and business firm, the company stated.
“These changes affect many of our colleagues, and we are committed to providing them with support through this transition with care and respect as we prepare the business for the future,” said Chief Executive Officer Tadeu Marroco in a statement.
