British American Tobacco (BATS) fell 1.60% in London trading after the cigarette maker announced it is cutting almost one fifth of its global workforce, removing or outsourcing 9,000 jobs as part of a cost-cutting programme targeting 600 million in annual savings by 2028. Of the total, 5,500 roles will be removed and 3,500 outsourced, with all cuts expected to be completed by end of 2026. The reductions affect all employees outside the US and are part of BAT's previously announced restructuring programme. The company employs approximately 47,000 people globally.
CEO Tadeu Marroco said he wants BAT to become "more agile, cost disciplined and technology enabled." The outsourcing component builds on an existing partnership with Accenture (ACN), through which some roles in the UK, Singapore, Costa Rica, Mexico, Poland, Romania, and Malaysia already moved to the consultancy last year. BAT also announced an expansion of its partnership with Indian IT firm ITC Infotech.
The cuts come as declining cigarette demand pushes BAT and its rivals to pivot toward smoke-free alternatives. Despite today's drop, BAT shares have risen 35% over the past year, lifting the group's market capitalisation to more than 100 billion and making it one of the most valuable companies on the London market.