(Archive photo: Henning Kaiser/DPA/AFP)
British American Tobacco (BAT) announced layoffs on Monday, with 5,500 jobs to remain in the business worldwide, while another 3,500 jobs are being outsourced to cut costs.
The maker of Lucky Strike and Dunhill cigarettes aims to save £600 million (approximately $792 million) annually by 2028 through a restructuring process that affects around 20% of BAT’s 47,000 strong workforce, a statement says.
BAT, along with other major tobacco companies, is faced with a decline in demand for tobacco cigarettes and is shifting its focus to newer products such as vapor smoking (“vaping”).
“We are building an organization that is ready for the future – more agile, cost-disciplined and technologically driven,” said Tadeu Marroco, the CEO.
“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 layoffs span BAT’s global workforce, with the exception of the US, its largest market, where the business is operated by its subsidiary Reynolds American.
(Photo: Freepik)
“British American Tobacco is the latest company to increasingly use technology to make its business run smoother and launch new products faster,” said Russ Mould, investment director of AJ Bell, a British investment platform.
“The extent of the cuts is worrying for the state of the labor market,” he added.