Lucky Strike maker BAT to cut 5,500 jobs with a 695 million euro savings target

British American Tobacco (BAT), the maker of Lucky Strike and Dunhill brands, is undergoing a comprehensive global restructuring to reduce costs and accelerate its strategy of transitioning to "smoke-free" products.

The company, which is listed on the London Stock Exchange, announced on Monday that it would cut 5,500 jobs. BAT also stated that approximately 3,500 positions would be transferred to third parties. Consequently, these two steps are expected to affect 9,000 employees, which corresponds to about one-fifth of its 47,000-strong global workforce.

It was reported that the company aims to achieve annual savings of 600 million pounds, or approximately 695 million euros, by 2028. It was noted that the restructuring covers BAT's global operations but does not include the US market, where it operates through its Reynolds American subsidiary.

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BAT is facing pressure similar to its competitors due to the decline in traditional cigarette consumption in established markets, health concerns, and tightening regulations. The company sees its future in "smoke-free" products such as Vuse e-cigarettes, glo heated tobacco devices, and Velo nicotine pouches.

BAT's goal is to generate half of its revenue from these new product categories by 2035. However, the launch of new nicotine products, particularly in the US, is being delayed due to lengthy regulatory approval processes. This situation limits the acceleration of sales in one of the company's priority markets.

CEO Tadeu Marroco described the cuts as part of a process to build a more agile, cost-disciplined, and technology-focused company. Marroco stated that employees affected by the change would be supported.

The newly announced savings target comes in addition to the 500 million pounds in cost reductions the company had previously planned for 2027. It was reported that some of the jobs to be outsourced are expected to go to the consulting firm Accenture.

Investors' initial reaction to the announcement was negative. BAT shares fell by approximately 2.5 percent in midday trading in London on Monday. Barclays analysts assessed that while the efficiency measure had been signaled earlier in the year, the scale of the cuts might have caught the market off guard.

News Source: 12punto