British American Tobacco to cut 9,000 jobs

British American Tobacco (BAT) will lay off almost a fifth of its global workforce as part of a major cost-cutting drive.

The tobacco giant, which makes Lucky Strike and Dunhill cigarettes, is cutting 5,500 roles and outsourcing a further 3,500 people.

The company said earlier this year that it planned to make savings to make itself “more digital and AI-focused.”

BAT did not say which regions would be affected by the layoffs, but said the United States was not affected.

The company currently has approximately 47,000 employees worldwide. It says the cost cuts are expected to save around £600 million a year by 2028.

Sales of traditional cigarettes are shrinking as smokers increasingly turn to electronic cigarettes and nicotine pouches.

BAT is shifting its focus to smoking alternatives such as Vuse e-cigarettes and Velo nicotine pouches to drive growth, but its sales and profit margins have been stagnant in recent years.

Sales in the US, its biggest market, were also affected by the cost of living as smokers turned to cheaper brands.

The company is also struggling with increased tariffs and stricter regulations in some markets.

American regulators have taken a tough stance on approving licenses and delaying launches for new products such as e-cigarettes. BAT says this has triggered an influx of illegal Chinese products, negatively affecting its sales and market share.

BAT said the layoffs, which have already begun, will be completed by the end of this year.

Chief executive Tadeu Marroco said the cuts would make the company “more agile, cost-disciplined and technology-driven”.

“These changes impact many of our colleagues, and we are focused on supporting them with care and respect throughout this transition as we position our business for the future.”