Economy alert: British American Tobacco to axe 9,000 jobs in major business overhaul

British American Tobacco has confirmed it intends to cut thousands of jobs as part of its latest restructuring process

British American Tobacco has confirmed it intends to cut thousands of jobs as part of its latest restructuring process

A historic UK tobacco company has unveiled plans to axe thousands of jobs and move some roles out of the UK in another blow to the economy.

British American Tobacco is slashing 9,000 positions from its workforce as the cigarette manufacturer pursues aggressive cost reductions.

The maker of Dunhill and Lucky Strike brands will eliminate 5,500 roles directly whilst transferring an additional 3,500 positions to external partner companies.

This sweeping restructure forms part of a comprehensive transformation programme targeting annual savings of £600million by 2028.

The vast majority of these workforce reductions have already been implemented, with the remaining cuts scheduled for completion before year's end.

BAT's positions in the UK will be affected, though the changes span multiple international markets, with the United States notably excluded from the programme.

Approximately 3,500 positions are being transferred to strategic partners, with Accenture among the firms taking on these roles. Supply network operations in both the UK and Singapore are included in this outsourcing arrangement.

The restructuring falls under BAT's "Fit2Win" initiative, a cost-cutting programme introduced last year designed to create a more nimble, financially disciplined and forward-thinking organisation.

Furthermore, the company has indicated these organisational changes are producing results, with enhanced operational performance reported across its various markets.

Tadeu Marroco, BAT's chief executive, said: "We are building a future-ready organisation that is more agile, cost disciplined and technology enabled.

"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."

In response to today's news, the company's share price dropped 1.6 per cent in early morning trading. Earlier this year, analysts had previously priced in job cuts at British American Tobacco as part of a future productivity drive.

However, Barclays analyst Pallav Mittal told Reuters that the extent of the job reductions will surprise the majority of investors.

Russ Mould, investment director at AJ Bell, added: "Major investments in technology continue to prompt significant headcount reductions in global companies as they strive for greater efficiencies.

"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.

"Unfortunately, that push is coming at the cost of 5,500 jobs, which are going by the end of the year. A further 3,500 roles have already moved to strategic partners, implying significant change in the business.

"The scale of cutbacks is a sign of the times, and the trend is worrying for the state of the labour market."

AMENDMENT: An earlier version of this article stated BAT has plans to 'move its base of operations out of the UK in another blow to the economy'. BAT is not planning to leave its UK base of operations. The story and the headline have been amended to reflect this. We are happy amend the record.