Lucky Strike Maker BAT to Cut 5,500 Jobs Globally in €695m Efficiency Push
Poinews.com – British American Tobacco (BAT), the parent company of iconic brands like Lucky Strike and Dunhill, has revealed plans to reduce its global workforce by 5,500 positions. This restructuring will also involve outsourcing approximately 3,500 roles to external firms, collectively impacting nearly 9,000 employees—about 18% of BAT’s total workforce of 47,000. The move is part of a broader strategy to cut costs and improve operational efficiency.
According to AFP, BAT targets annual savings of £600 million (€695m) by 2028. While the restructuring spans all regions, the U.S. market remains unaffected. This is managed through Reynolds American, BAT’s subsidiary that oversees its largest sales region. The decision reflects the company’s efforts to adapt to shifting market dynamics.
Shift to Smokeless Alternatives
BAT is positioning itself for the future by focusing on “smokeless” innovations, including vaping products like Vuse, heated-tobacco devices such as glo, and nicotine pouches under the Velo brand. These initiatives are central to its goal of generating half its revenue from non-combustible offerings by 2035. However, the transition has faced hurdles, particularly in the U.S.
“Cutting jobs is part of building a more agile, cost-disciplined, and technology-enabled company,” said CEO Tadeu Marroco.
The U.S. rollout of new nicotine products has been delayed by prolonged regulatory processes, limiting sales in the group’s most critical market. Marroco emphasized that the cuts would be handled with care, ensuring support for affected staff during the transition.
These measures build on earlier plans to reduce costs by £500 million (€580m) in 2027. Some of the outsourced work will be managed by consulting firm Accenture. Despite the company’s prior announcements, the scale of job reductions surprised investors, leading to a 2.5% drop in BAT’s shares during Monday’s trading in London.
Analyst Perspectives
Analysts at Barclays noted that while the cost-cutting plan was anticipated, the extent of the job cuts could still disrupt market expectations. Russ Mould, an investment director at AJ Bell, added that BAT’s approach exemplifies a growing trend of relying on technology to streamline operations and accelerate product launches. He warned that the magnitude of these changes signals broader challenges for the labor market.
