British American Tobacco has announced plans to cut about 20% of its workforce as it pursues an AI-driven overhaul to lower costs and lift profits amid regulatory challenges and delayed launches.
British American Tobacco, in a statement on Monday, June 29, 2026, said it would cut about 5,500 jobs and move roughly 3,500 roles to third-party firms, including Accenture, affecting around 9,000 employees in total.
The restructuring excludes the United States, the company’s biggest market.
BAT said the programme was expected to deliver £600 million ($793 million) in additional annualised savings by 2028, with £500 million targeted by 2027.
Still, its shares were down 1.6% to £46.73 at 0940 GMT, underperforming the FTSE 100, which was down 0.3%.
“These changes affect many of our colleagues and we are focused on supporting them through this transition with care and respect,” British American Tobacco CEO Tadeu Marroco said.
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He said the overhaul would make the company more agile, cost-disciplined and technology-enabled.
BAT had flagged in February that its new productivity drive could lead to job cuts, but the scale of the reductions may surprise investors, Barclays analyst Pallav Mittal said in a note.
The Lucky Strike and Dunhill cigarette maker’s sales and profit growth have been sluggish in recent years, often missing or only just meeting company targets, disappointing some investors.
U.S. tobacco sales have also been hit as smokers swap to cheaper brands amid high living costs, while BAT also faces rising duties, tighter regulations, and illicit trade in markets including Australia and Bangladesh.
