By 2028, the manufacturer of Dunhill and Lucky Strike cigarettes hopes to save £600 million ($792 million) annually through a reorganization that will impact almost 20% of its 47,000 employees, according to a statement.

As the market for traditional cigarettes declines, BAT and other large tobacco companies are shifting their attention to other categories like vapes and oral nicotine products.

Chief executive Tadeu Marroco stated, “We are building a future-ready organization that is more agile, cost disciplined, and technology enabled.”
“Many of our colleagues are impacted by these changes, and as we position the company for the future, we are focused on supporting them through this transition with care and respect,” he continued.
With the exception of the United States, which is BAT’s largest market and where the company is operated through its subsidiary Reynolds American, the layoffs affect all of the company’s employees worldwide.

On the London stock exchange, the company’s shares dropped 1.5%, while the top-tier FTSE 100 index was down 0.2%.

According to Russ Mould, investment director at AJ Bell, “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.”

“The size of the cuts is a sign of the times, and the trend is concerning for the state of the labor market,” he continued.