British American Tobacco (BAT) plans to reduce its global workforce by approximately 20% this year, cutting 5,500 jobs and outsourcing a further 3,500 positions by the end of 2026 [1, 2, 3]. BAT currently employs around 47,000 people worldwide, excluding its US business operated through subsidiary Reynolds American, which will not be affected by these changes [1, 2, 3, 4].
The job cuts and outsourcing will impact multiple countries including the UK, Singapore, Costa Rica, Mexico, Poland, Romania, Malaysia, and Pakistan [1, 2, 3]. Some outsourced roles in Pakistan are being transferred to Systems Ltd, while jobs in Poland and Romania are being outsourced to ITC Infotech. BAT has partnered with Accenture to handle outsourcing in various service center functions across several nations [1, 2, 3, 5, 6].
Earlier this year in January, BAT announced it would close its eighth largest cigarette factory in South Africa, citing challenges from illicit trade as part of its restructuring [1, 2, 3, 5]. The job reductions and factory closures align with BAT's transformation programme called Fit2Win, launched in 2025, which aims to simplify operations, reduce complexity and costs, and become more technology enabled [1, 3, 6].
BAT expects to save £600 million (about USD 793 million) annually by 2028 through this programme, with around £500 million of savings targeted by 2027 [1, 2, 3, 7, 5]. Interim CFO Javed Iqbal noted the use of AI and data analytics is influencing staffing levels and the cost savings target [1, 2, 3].
CEO Tadeu Marroco said BAT is building a "future-ready organisation that is more agile, cost disciplined and technology enabled," adding, "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" [3, 5, 8].
BAT is also responding to declining demand for traditional cigarettes, forecasting a global volume drop of about 2-2.5% in 2026, while aiming to grow revenue from smoke-free nicotine products like Vuse vapes and Velo pouches to over half of total revenue [1, 2, 3, 7, 9].
BAT shares fell 1-2% in London trading after the announcement but remain up 12-13% year-to-date [1, 3, 10]. The company plans to complete the workforce reductions and outsourcing by the end of 2026 [1, 2, 3, 7, 5].
