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British American Tobacco\u2019s cost-saving programme is expected to add US$793 million in annualised incremental savings by 2028. (BAT pic)
\nLONDON: British American Tobacco (BAT) said on Monday it plans to reduce its workforce by about 20%, as it pushes ahead with an AI-driven transformation programme to cut costs and bolster profits amid regulatory challenges and delayed launches.<\/p>\n
The tobacco giant said it would cut 5,500 jobs and move a further 3,500 roles to third-party firms, including Accenture, impacting a total of 9,000 employees.<\/p>\n
The restructuring does not include the US, its biggest market.<\/p>\n
The cost-saving programme is expected to add \u00a3600 million (US$793 million) worth of annualised incremental savings by 2028, with \u00a3500 million already targeted by 2027.<\/p>\n
\u201cThese changes affect many of our colleagues and we are focused on supporting them through this transition with care and respect,\u201d CEO Tadeu Marroco said in a statement.<\/p>\n
He added that the move would make the company more agile, cost-disciplined and technology-enabled.<\/p>\n
The Lucky Strike and Dunhill cigarette maker\u2019s sales and profit growth have been sluggish in recent years, falling short of or just reaching its own targets, disappointing some investors.<\/p>\n
The company\u2019s main profit driver \u2013 traditional tobacco \u2013 is in terminal decline, with BAT predicting a global, industry-wide decline of 2.5% this year.<\/p>\n
BAT is shifting its focus to smoking alternatives like its Vuse vapes and Velo nicotine pouches to drive growth, but it has faced problems and fallen behind key rival Philip Morris International.<\/p>\n
Sales in the critical US market have been constrained by regulatory requirements that have delayed launches and helped rivals from China \u2013 often selling without the required permission from US regulators \u2013 to take its market share.<\/p>\n
Its US tobacco sales have also been hit as smokers swap to cheaper brands amid soaring costs of living, while BAT is also battling rising duties, stricter regulations and illicit trade in places like Australia and Bangladesh.<\/p>\n
The company previously signalled in February that its new productivity programme could lead to job cuts and in June, it kept its group-wide guidance unchanged.<\/p>\n
Even so, the scale of the \u201cbroad-based\u201d reductions could surprise investors, said Pallav Mittal, an analyst at Barclays, in a note.<\/p>\n
The company\u2019s shares were recently down 1.3%.<\/p>\n
BAT on Monday said that most of the role changes had now been confirmed with employees, with remaining consultations being carried out in compliance with local requirements.<\/p>\n","protected":false},"excerpt":{"rendered":"British American Tobacco\u2019s cost-saving programme is expected to add US$793 million in annualised incremental savings by 2028. (BAT…\n","protected":false},"author":2,"featured_media":46596,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[20745],"tags":[33509,20030,33510,23380,30906,13797],"class_list":["post-73556","post","type-post","status-publish","format-standard","has-post-thumbnail","category-british-american-tobacco","tag-ai-driven","tag-british-american-tobacco","tag-pallav-mittal","tag-tadeu-marroco","tag-the-us","tag-workforce"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@UnitedKingdom\/116839942884905115","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/posts\/73556","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/comments?post=73556"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/posts\/73556\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/media\/46596"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/media?parent=73556"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/categories?post=73556"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/tags?post=73556"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}