British American Tobacco to cut 9,000 jobs as it turns to AI

British American Tobacco (BAT) plans to cut around a fifth of its 47,000-strong workforce this year.

The tobacco giant, which owns cigarette brands including Lucky Strike and Dunhill, is axing 5,500 jobs by the end of this year and will outsource a further 3,500 jobs to partner businesses, meaning 9,000 staff will be affected in total.

There will be no cuts in its operations in the US, where it operates under its subsidiary Reynolds American.

BAT told This is Money it would not provide country-by-country details of jobs affected. It remains unclear how many staff in the UK will have their jobs cut.

BAT said most ‌of the changes it planned had been confirmed ‌with affected employees but added that some consultations were yet to be completed.

The cigarette-maker is looking to cut costs and wants to bolster its use of artificial intelligence to become more 'technology enabled'.

It said the cuts formed part of its 'Fit2Win' programme launched last year.

The business, which is listed and headquartered in London, is grappling with dwindling demand for traditional cigarettes and pressure to invest in nicotine alternatives such as vaping.

BAT said the cuts, which have already begun, were part of a 'transformation programme' expected to create £600million of annual cost savings by the end of 2028.

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The group's chief executive, Tadeu Marroco, said the firm was 'building a future-ready organisation that is more agile, cost disciplined and technology enabled'.

He added: 'These changes affect many of our colleagues, and we are focused on supporting them through this transition with care and respect, as we position the business for the future.

'Whether through strategic partnerships or a more focused operational footprint, we are creating a simpler, faster BAT.'

In 2025 BAT partnered with the technology consultancy Accenture to outsource some of its work. Certain BAT jobs in the UK, Poland, Romania, Costa Rica, Mexico, Singapore and Malaysia have been absorbed by Accenture since the deal, BAT said today.

BAT has also expanded its partnership with ITC Infotech and is currently transferring a number of Information, Digital and Technology roles in Poland and Romania to ITCI.

In January, BAT announced it would close its eighth largest factory, located in South Africa, because of competition from illicit trade. Today, the group reaffirmed that it had shut the factory 'primarily due to the unsustainable level of illicit products that now dominate the market'.

In February, the FTSE 100-listed firm announced its AI-driven productivity programme alongside its annual results, which saw it unveil a £10billion profit and £6.3billion of cash flow.

Interim finance chief Javed Iqbal said in February that the programme would allow group to streamline operations with increased automation of more routine tasks using data analytics and AI tools.

He said these efforts to 'simplify' operations would affect staffing levels.

'It will have an impact on the size of the organisation,' Iqbal told reporters on a call in February.

BAT shares were down 1.49 per cent or 71.00p to 4,680.00p on Monday, having risen by 35 per cent in the past year.