British American Tobacco (BAT) is implementing a significant workforce reduction, aiming to cut 9,000 jobs by 2026. This includes approximately 2,400 senior management positions. The restructuring is part of a broader turnaround strategy to streamline operations and enhance efficiency, with an anticipated cost saving of $1.2 billion for the company. The job cuts are expected to impact roughly 17% of BAT's global workforce of over 55,000 employees.
This move is driven by BAT's accelerated pivot towards non-combustible product categories, such as vapes and nicotine pouches, to address declining cigarette sales. The company has been investing heavily in these "new categories," which are expected to constitute a larger portion of its revenue in the coming years. For instance, revenue from newer products grew by double digits in the second half of the previous year and 7% for the full year through December, making up 18.2% of total sales in 2025, up from 17.5% in 2024 Reuters.
The job reductions are also linked to an AI-driven productivity program and a broader "Fit2Win" initiative, which aims to secure around $750 million (£600 million) in cost savings by the end of 2028 europesays.com. The company anticipates that this optimization will make the business more digital and AI-focused, affecting staffing levels as operations become more automated. While specific locations for job cuts were not fully disclosed, BAT Malaysia announced its own workforce optimization exercise starting July 1, 2026, to align with future operating requirements thestar.com.my.
Despite the significant job cuts and operational changes, BAT leadership maintains confidence in the company's financial performance. CEO Tadeu Marroco expressed satisfaction with accelerating momentum through 2025, enabling full-year delivery at the top end of guidance. The company aims for sustainable shareholder value through robust cash returns, including progressive dividends and a $1.6 billion (£1.3 billion) share buy-back program for 2026 europesays.com. These strategic changes are expected to contribute to achieving a mid-term algorithm from 2026.
