British American Tobacco to cut nearly 9,000 jobs: Here's why

British American Tobacco (BAT) is carrying out a major restructuring exercise that will cut nearly 9,000 jobs. As part of the plan, the cigarette-maker company will cut 5,500 jobs and outsource another 3,500 roles to third parties. The move forms part of the company's AI push to integrate artificial intelligence into its operations, boost productivity and accelerate technologically.

"These changes affect many of our colleagues, and we are focused on supporting them through this transition with care and respect," CEO Tadeu Marroco said in a statement, adding that the move is focused on making the firm more agile, cost-disciplined and technology-enabled.

The report added that the restructuring operations are expected to generate around USD 793 million in annual savings by 2028. The overhaul also indicates BAT's growing focus on vapes and nicotine products such as vapes and nicotine pouches, which it hopes will become central to its future business strategy.

Tighter regulations and higher tobacco taxes

The tobacco giant has been facing pressure from declining cigarette sales, which have weighed on profits as consumers increasingly shift toward smoke-free products. BAT is also contending with tighter regulations and higher tobacco taxes in key markets such as the United States, while many consumers are turning to lower-cost tobacco products that often face less regulatory scrutiny. In addition, an influx of inexpensive Chinese tobacco products has intensified competition for established industry players like BAT. On Monday, shares of BAT also fell 1.7 per cent.

At the beginning of 2026, the firm closed its South African facility because it struggled to grow the illicit trade in the country. The company's facility in South Africa had been working at just 35 per cent capacity due to the loss of high volume after the illicit trade boomed.

Last year, BAT declared a partnership with Accenture in order to become a faster, more agile and technologically-driven business. With this partnership, BAT focuses on achieving a transformation in its Global Business Solutions function and Supply Network Operations. "This collaboration will help simplify processes, improve speed to market, enhance compliance agility and create a foundation for future growth," BAT had said in a release.