British American Tobacco cuts 5,500 jobs and outsources 3,500 roles, affecting a fifth of its global workforce

The restructuring plan

British American Tobacco announced on Monday that it is cutting 5,500 jobs globally and moving a further 3,500 roles to strategic partners. The move, which exempts the US market, affects roughly 20 percent of the group's 47,000 employees. Most of the changes have already been communicated to staff, with remaining consultations proceeding under local requirements. CEO Tadeu Marroco said the company is building a more agile, cost-disciplined organisation that leans on technology.

We are building a future-ready organization, more agile, with more rigorous cost management and technological support.

The savings roadmap

BAT expects the programme to deliver £600 million of annualised incremental savings by 2028, with £500 million already targeted for 2027. The plan, branded Fit2Win and launched in 2025, is intended to simplify the corporate structure and redirect funds into smoke-free alternatives. The company has partnered with Accenture to outsource functions, with transitions already under way in the UK, Poland, Romania, Singapore, Costa Rica and Malaysia.

A market in decline

The restructuring responds to a structural drop in traditional cigarette consumption. BAT forecasts that global industry cigarette volumes will shrink by 2.5 percent in 2026. The company, like rival Philip Morris International, aims to generate more than half of its revenue from non-combustible products such as Vuse e-cigarettes and Velo nicotine pouches. However, its alternative-product business continues to lag behind competitors, while US sales have been pressured by regulatory delays, rising living costs and shifts toward cheaper brands.

Factory closure and regional effects

As part of the overhaul, BAT will shut its factory in Heidelberg, South Africa, citing an unsustainable level of illicit trade that now dominates the market. In Germany, where BAT runs its country operations from Hamburg and a factory in Bamberg, it was not immediately clear how many local positions would be affected. Other markets facing excise increases, tighter rules and illicit commerce include Australia and Bangladesh.

Market reaction

Shares of the London-listed company fell as much as 2 percent during the session before closing down 0.7 percent on the FTSE 100. Analysts at Barclays noted that while BAT had flagged in February that automation would lead to job losses, the scale of the cuts surprised investors.

The company stressed that it is supporting affected employees with care and respect during the transition.