British American Tobacco to cut 5,500 jobs and outsource 3,500 in AI-driven overhaul
The maker of Dunhill and Lucky Strike will eliminate 5,500 positions and outsource 3,500 more, affecting about 20% of its global workforce, as it pursues £600 million in annual savings by 2028.
Job cuts and outsourcing
British American Tobacco (BAT) will eliminate 5,500 jobs and outsource a further 3,500 roles to strategic partners, affecting about 20% of its 47,000-strong global workforce. The cuts exclude the United States, where the company operates through its subsidiary Reynolds American. Most of the changes have already been confirmed with employees, while remaining consultations are being carried out in compliance with local requirements.
Fit2Win transformation programme
The restructuring is part of the Fit2Win programme, launched in 2025, which aims to make the group more agile, cost-disciplined and technology-enabled. BAT expects the programme to generate £600 million of annualised incremental savings by the end of 2028, with £500 million already targeted by 2027. The company has partnered with Accenture to access advanced AI solutions, and some roles in the UK, Poland, Romania, Costa Rica, Mexico, Singapore and Malaysia have already been absorbed by the consultancy.
- Fit2Win programme launched to streamline operations and cut costs
- Partnership with Accenture for AI solutions; some roles transferred in UK, Poland, Romania, Costa Rica, Mexico, Singapore, Malaysia
- Closure of eighth-largest factory in South Africa announced, citing illicit trade competition
- 5,500 job cuts and 3,500 outsourcing roles announced, affecting 20% of workforce
- Target of £500 million annualised incremental savings
- Target of £600 million annualised incremental savings
CEO statement
Chief executive Tadeu Marroco said the company was building a "future-ready organisation that is more agile, cost disciplined and technology enabled". He added:
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.
Financial context
BAT reported a profit of £7.764 billion in 2025, more than double the previous year (a 153.1% increase), on revenues of £25.61 billion. Traditional cigarette sales contributed £20.201 billion, a decline of 2.3% from 2024, as the group grapples with falling demand and invests in smoke-free alternatives such as Vuse vapes and Velo nicotine pouches. The company expects mid-teen percentage revenue growth in its new categories this year. Interim finance chief Javed Iqbal told the Financial Times in February that plans to simplify the company would make it "more digital and AI-focused".
- Traditional cigarettes
- 20.201 £bn
- Other products
- 5.409 £bn
Market reaction and outlook
Shares in the FTSE 100 company fell by about 1.4% in early trading on Monday following the announcement. BAT has also been shutting down some traditional cigarette manufacturing, including the closure of its eighth-largest factory in South Africa in January, citing competition from illicit trade. The group forecasts that global cigarette industry volumes will decline by about 2.5% this year.
