British American Tobacco to lay off 9,000 employees as it ramps up AI efforts

British American Tobacco (BAT) has announced a major workforce restructuring as part of its long-term strategy to reduce costs and modernize its business. The company plans to eliminate 5,500 jobs and outsource an additional 3,500 roles while increasing its focus on digital technologies and artificial intelligence.

The restructuring is aimed at creating a more efficient and technology-driven organization capable of adapting to changing market conditions. BAT expects the initiative to generate annual savings of approximately £600 million ($810 million) by the end of 2028.

The company stated that its operations in the United States will not be affected by the latest round of job reductions. However, employees in several other countries may experience changes as part of the global transformation program.

BAT's decision comes as traditional cigarette sales continue to decline, with consumers increasingly switching to alternative nicotine products such as vaping devices and nicotine pouches.

To support future growth, the company is expanding its portfolio of smoke-free products, including Vuse vaping devices and Velo nicotine pouches, although these categories have yet to fully replace cigarette revenues.

Chief Executive Tadeu Marroco said the company is building a future-ready organization that is more agile, disciplined in managing costs, and better equipped with advanced technologies.

Artificial intelligence has become a central part of BAT's modernization strategy, with the company investing in digital tools to improve efficiency and streamline business operations.

BAT has also strengthened its partnership with Accenture, allowing the company to outsource selected business functions while gaining access to advanced AI-powered solutions.

As part of the outsourcing agreement, certain roles in countries including the United Kingdom, Poland, Romania, Costa Rica, Mexico, Singapore, and Malaysia have already transitioned to Accenture.

The company currently employs around 47,000 people worldwide, making this one of its most significant workforce restructuring efforts in recent years.

Management emphasized that affected employees will receive support during the transition, highlighting the company's commitment to handling the restructuring responsibly.

BAT continues to face pressure from rising taxes, stricter regulations, and changing consumer preferences across several international markets.

Its largest market, the United States, has experienced weaker consumer spending as higher living costs have affected demand for tobacco products.

Industry experts note that the transition from traditional cigarettes to next-generation nicotine products has been slower than many tobacco companies initially expected.

Manufacturers also face increasing competition from illegal vaping products, creating additional challenges for legal producers operating in regulated markets.

The company believes cost reductions and digital transformation will improve long-term competitiveness while supporting investments in future growth opportunities.

BAT expects the workforce changes to be completed by the end of this year as it continues implementing its global transformation strategy.

**One-line summary:** BAT is cutting 5,500 jobs and outsourcing 3,500 roles as it shifts toward AI, digital operations, and smoke-free products while reducing costs.