British American Tobacco will cut about 5,500 jobs and transfer another 3,500 roles to external partners by the end of 2026. The changes will affect nearly one-fifth of its global workforce of approximately 47,000 employees, although its U.S. operations are excluded.
The maker of Lucky Strike and Dunhill cigarettes expects the Fit2Win restructuring programme to generate around £600 million in annual savings by the end of 2028. BAT said the programme is intended to simplify operations, reduce costs and make the company more technology-focused.
Roles Move to Technology and Service Partners
BAT said in its official announcement that some roles have already moved to Accenture, Systems Limited and ITC Infotech. The affected functions include positions at service hubs in Costa Rica, Mexico, Poland, Romania and Malaysia, alongside selected roles in Pakistan, the UK and Singapore.
The company is also transferring some information, digital and technology positions in Poland and Romania to ITC Infotech. BAT and the technology provider will also support a new capabilities centre in India and existing technology hubs in Malaysia and Mexico.
Most affected employees have already been informed, while remaining consultations are continuing under local employment rules. Chief executive Tadeu Marroco said the company would support workers through the changes with care and respect.
Declining Cigarette Sales Pressure the Business
BAT is reducing costs as traditional cigarette sales continue to decline and customers increasingly switch to alternatives such as Vuse vapes and Velo nicotine pouches. The company expects global industry volumes for conventional tobacco products to fall by 2.5% in 2026.
Sales and profit growth have remained weak in recent years, while BAT has faced tighter regulations, rising duties and competition from illegal products. In the U.S., lengthy approval processes for new nicotine products have delayed launches, while higher living costs have led some smokers to choose cheaper cigarette brands.
The company has also reduced its manufacturing footprint over the past two years. Its changes include the planned closure of a factory in South Africa, where BAT said illegal tobacco products had made continued production unsustainable.
Dan Coatsworth, head of markets at AJ Bell, said tobacco companies have faced a slow transition from cigarettes to newer nicotine products. He added that manufacturers are also competing with a large number of illegal vaping products.
Featured image credits: Wikimedia Commons
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