British American Tobacco to cut 9,000 jobs in major restructuring

British American Tobacco is slashing nearly 9,000 jobs as part of a major AI-driven restructuring. The cigarette-maker will eliminate 5,500 roles and outsource 3,500 to boost productivity, save costs, and focus on smoke-free alternatives.

British American Tobacco is undertaking a restructuring exercise that will cut nearly 9,000 jobs. The cigarette-maker will eliminate 5,500 roles, while 3,500 roles will be outsourced to third parties, Reuters reported.

AI and Cost-Saving Goals

The overhaul is part of the company's AI push to boost productivity and become technologically enabled. "These changes affect many of our colleagues, and we are focused on supporting them through this transition with care and respect," CEO Tadeu Marroco said in a statement, according to the report.

The move is aimed at making the company more agile, cost-disciplined and technology-enabled, the company's CEO said. The restructuring operations are expected to contribute to USD793 million in annualised incremental savings by 2028, the report added.

Navigating a Challenging Market

The ambitious restructuring at BAT underscores the growing focus on vapes and nicotine pouches as it aims to make these products the mainstay of its strategy. The company has been struggling with falling cigarette sales, which have led to sluggish profits amid a broader switch by the industry towards smoke-free alternatives.

BAT is battling strict regulations and duty hikes in some of its big markets like the US amid a shift by buyers to cheaper tobacco, which quite often escapes scrutiny. Cheap Chinese tobacco is also flooding the market and is straining conventional players like BAT.

Early this year, the company ordered the closure of its South African facility as it battles growing illicit trade in the country. The company's South Africa facility had been operating at just 35 per cent capacity due to severe volume losses as the illicit trade boomed.

Shares of BAT fell 1.7 per cent on Monday.

Partnership for Business Transformation

Last year, BAT announced a partnership with Accenture as part of its drive to become a faster, more agile and technologically-driven business.

Through this partnership, BAT aims to achieve a transformation in its Global Business Solutions function and Supply Network Operations, the company said. "This collaboration will help simplify processes, improve speed to market, enhance compliance agility and create a foundation for future growth," BAT had said in a release. (ANI)

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