British American Tobacco Slashes Workforce in AI Overhaul

British American Tobacco (BAT) plans to cut 5,500 jobs and transfer 3,500 roles to third-party firms, excluding the U.S., as part of an AI-driven restructuring aimed at saving £600 million by 2028. BAT is shifting from traditional tobacco to alternative products like Vuse vapes amid regulatory challenges.

British American Tobacco is making a significant workforce reduction as it embraces an AI-driven transformation to enhance cost-efficiency and profitability. The move comes amid regulatory hurdles and postponed product launches.

The company plans to cut around 5,500 jobs and move approximately 3,500 roles to third-party firms like Accenture, affecting a total of 9,000 employees globally, excluding the U.S., its largest market. BAT's main revenue source, traditional tobacco, is declining, prompting a shift towards smoking alternatives.

The restructuring aims to achieve £600 million in annualised savings by 2028, with a target of £500 million by 2027. While shares fell 2% following the announcement, analysts express apprehensions about potential further actions needed to meet targets. CEO Tadeu Marroco emphasized the company's commitment to becoming more agile and technology-enabled.