UK cigarette giant BAT to cut 5,500 jobs globally
British American Tobacco announced sweeping job cuts on Monday as the cigarette maker axes 5,500 roles globally and outsources another 3,500 to help slash costs.
The maker of Lucky Strike and Dunhill cigarettes aims to save £600 million ($792 million) a year by 2028 in a restructuring that will affect around 20 percent of BAT’s 47,000-member workforce, it said in a statement.
BAT, along with other tobacco majors, faces declining demand for traditional cigarettes, and is turning its focus instead to newer categories including vapes and oral nicotine products.
“We are building a future-ready organisation that is more agile, cost disciplined and technology enabled,” said chief executive Tadeu Marroco.
“These changes affect many of our colleagues, and we are focused on supporting them through this transition with care and respect, as we position the business for the future,” he added.
The job cuts span BAT’s global workforce except for the United States, its largest market, where the business is run through its subsidiary Reynolds American.
Shares in the company fell 1.1 percent on the London stock exchange, where the top-tier FTSE 100 index was trading flat overall in afternoon deals.
BAT aims for smokeless products to reach at least 50 percent of its revenues by 2035.
Earlier this year, Britain’s parliament approved a bill to ban those aged 17 and under from ever legally buying tobacco products during their lifetime.
The law hands the government new powers to restrict the flavours and packaging of vapes and bans vaping in places where smoking is already banned, which is extended to children’s playgrounds and areas near schools.
“British American Tobacco is the latest name to ramp up the use of technology to help its business run more smoothly and be able to launch new products faster,” said AJ Bell investment director Russ Mould.
“The scale of cutbacks is a sign of the times, and the trend is worrying for the state of the labour market,” he added.
The cigarette maker has a market capitalisation of more than £100 billion, making it one of the UK’s most valuable companies.
The UK will meanwhile become the second country to implement a generational ban, after the Maldives.
In France, Green lawmaker Nicolas Thierry has introduced a cross‑party bill to ban the sale of tobacco to anyone born after 2014.
Similar proposals have been put forward in the US states of Hawaii and Indiana.
AFP
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