LONDON — British American Tobacco announced it will cut 5,500 jobs by the end of the year and outsource an additional 3,500 positions. These reductions are part of a transformation program designed to achieve £600 million in annual cost savings by the conclusion of 2028.

The total workforce reduction, encompassing both cuts and outsourced roles, amounts to 9,000 positions. This figure represents approximately one-fifth of the company's total workforce of 47,000 employees. No job cuts will occur in the U.S. operations of British American Tobacco, which function under the subsidiary Reynolds American.

Tadeu Marroco, Chief Executive of British American Tobacco, stated, "British American Tobacco is building a future-ready organisation that is more agile, cost disciplined and technology enabled." He added, "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."

Last year, British American Tobacco partnered with Accenture to outsource some of its work. Since that agreement, various jobs in the U.K., Poland, Romania, Costa Rica, Mexico, Singapore, and Malaysia have been absorbed by Accenture. British American Tobacco manufactures products such as Dunhill and Peter Stuyvesant cigarettes, and it also sells Vuse vapes and Velo nicotine pouches. The company is headquartered and listed in London.

British American Tobacco has predicted a global decline in cigarette industry volumes of about 2.5% this year. Conversely, the company informed investors this month that revenue growth in its smoke-free products category is accelerating. It anticipates mid-teen percentage revenue growth in this category for the current year. In early trading on Monday, shares in British American Tobacco fell by approximately 1.4%, though they had risen by about 11.8% year-to-date as of that Monday's early trading.

Interim finance chief Javed Iqbal told the Financial Times in February that plans to simplify British American Tobacco would lead to a more digital and AI-focused structure. British American Tobacco's decision to cut and outsource 9,000 jobs represents a portion of its global workforce tied to a strategy for annual cost savings, consistent with the company's stated goal of achieving a more agile and technologically advanced organization. These actions occur as the company navigates a predicted decline in traditional cigarette volumes while focusing on growth in its smoke-free product categories.