By Timothy S. Donahue
Top Takeaways:
- Major restructuring: BAT will eliminate 5,500 jobs and outsource another 3,500 roles as part of an AI-driven transformation program.
- Smoke-free focus: The company said restructuring supports its transition toward Vuse vape and Velo nicotine pouch products.
- £600 million savings: BAT expects the program to generate an additional £600 million in annualized savings by 2028.
British American Tobacco will eliminate approximately 5,500 positions globally and transfer another 3,500 roles to strategic business partners as part of its Fit2Win transformation program, an AI- and technology-driven overhaul designed to simplify operations, reduce costs, and accelerate the company’s long-term transition to a leaner, smoke-free-focused business.
The restructuring, announced on June 29, will affect about 9,000 employees—roughly one-fifth of BAT’s global workforce of about 47,000—excluding employees in the United States, the company’s largest market. Central to Fit2Win is BAT’s strategy to shift selected business functions to specialized technology and business-services partners.
The company said roles have already transitioned to Accenture across Global Service Hubs in Costa Rica, Mexico, Poland, Romania, and Malaysia, as well as across supply network operations in the United Kingdom and Singapore. Additional technology roles are moving to ITC Infotech, while selected positions in Pakistan have transferred to Systems Ltd.
BAT also announced a new Future Capabilities Centre in India, developed with ITC Infotech, to support the company’s global digital operations alongside its existing technology hubs in Malaysia and Mexico.
BAT said Fit2Win, launched in 2025, aims to create “a more agile, cost-disciplined and technology-enabled” organization by reducing operational complexity, expanding strategic technology partnerships, and streamlining the company’s global operating model. The company expects the initiative to generate approximately £600 million ($793 million) in annual cost savings by the end of 2028, including about £500 million by 2027.
BAT said the initiative is expected to deliver an additional £600 million ($793 million) in annualized cost savings by 2028, with £500 million by 2027. These savings are separate from the company’s previously announced long-term efficiency targets.
Chief Executive Officer Tadeu Marroco said the changes are intended to make the organization more agile and technology-enabled.
“We are building a future-ready organization that is more agile, cost-disciplined and technology-enabled,” Marroco said. “Fit2Win is central to this ambition, strengthening how we operate and our ability to compete in a rapidly evolving environment. Whether through strategic partnerships or a more focused operational footprint, we are creating a simpler, faster BAT.”
The restructuring comes as BAT continues to navigate declining global cigarette volumes while investing in reduced-risk products. The company expects worldwide combustible tobacco industry volumes to decline about 2.5% this year and has identified Vuse vaping products and Velo nicotine pouches as key drivers of future growth.
However, BAT’s smoke-free transition has faced challenges. The company has cited delays in U.S. regulatory approvals for new vapor products, increased competition from unauthorized disposable e-cigarettes, downtrading by smokers amid inflationary pressures, and a growing illicit trade in markets including Australia and Bangladesh.
The latest announcement builds on productivity initiatives BAT first outlined earlier this year. Analysts said workforce reductions were expected after the company warned in February that a new efficiency program could lead to job cuts, though the scale of the restructuring exceeded many expectations. BAT shares fell about 2% after the announcement.
BAT said its ongoing manufacturing optimization includes the previously announced closure of its Heidelberg factory in South Africa, citing the country’s growing illicit cigarette market, which the company has described as rendering the facility economically unsustainable.
Together, the workforce reductions, expanded technology partnerships and manufacturing consolidation represent one of BAT’s largest operational restructurings in recent years.
The program illustrates how multinational tobacco companies are increasingly relying on automation, artificial intelligence and specialized technology partners to offset declining combustible cigarette volumes while investing in smoke-free product categories such as Vuse vaping products and Velo nicotine pouches.
