BAT to Cut 5,500 Jobs Globally in AI-Driven Restructuring

British American Tobacco (BAT) will cut nearly 20% of its workforce as part of an artificial intelligence (AI)-driven restructuring plan aimed at boosting profitability by reducing costs amid regulatory challenges and delays in launching new products.

The company said on Monday that it will eliminate about 5,500 jobs and transfer around 3,500 positions to third-party firms, including Accenture. In total, the restructuring will affect about 9,000 employees. However, the program will not apply to the United States, BAT's largest market.

BAT expects the restructuring to generate an additional £600 million (about $793 million) in annual savings by 2028. The company aims to achieve £500 million of those savings by 2027.

Following the announcement, BAT's shares fell 1.6% to £46.73. By comparison, the FTSE 100 index was down 0.3%.

In a statement, BAT Chief Executive Tadeu Marroco said that the change will affect many working in BAT and the company will do everything to support them with care and respect throughout this transition.

He said the restructuring would make the company more agile, cost-conscious, and technology-driven.

BAT had signaled as early as February that a new productivity initiative could lead to job cuts. However, Barclays analyst Pallav Mittal said the scale of the layoffs could come as a surprise to investors.

BAT's sales and profit growth have slowed in recent years. The company has often either missed its targets or achieved them by a narrow margin, disappointing some investors.

Source: Reuters (adapted)