British American Tobacco will cut or outsource 9,000 roles globally as part of an AI-driven transformation programme announced on Monday, aiming to reduce costs by £600 million a year by 2028 while reshaping its operations outside its largest market, the United States.

The FTSE 100 tobacco group will eliminate 5,500 jobs and transfer a further 3,500 roles to third-party providers, affecting around one fifth of its global workforce of approximately 47,000 employees. The restructuring forms part of the company's Fit2Win programme, launched in 2025, and excludes its US business, where regulatory delays have slowed the rollout of newer nicotine products.

Tadeu Marroco, chief executive, said: "These changes affect many of our colleagues and we are focused on supporting them through this transition with care and respect." He added that the programme would create "a future-ready organisation that is more agile, cost disciplined and technology enabled".

According to BAT, the programme remains on track to deliver approximately £600 million in annual cost savings by the end of 2028, with £500 million already targeted by 2027. The company said most affected employees have already been informed, with remaining consultations continuing in line with local legal requirements.

BAT said strategic partnerships are central to the overhaul, with work transferring to companies including Accenture and ITC Infotech across technology, business services and supply chain operations. Roles have already moved from BAT sites in countries including the UK, Poland, Romania, Costa Rica, Mexico, Malaysia and Singapore, while selected positions in Pakistan have transferred to Systems Ltd.

The restructuring comes as BAT faces weakening demand for traditional cigarettes, which remain its largest source of profit. The company expects global cigarette industry volumes to decline by 2.5 per cent this year, while its expansion into products such as Vuse vapes and Velo nicotine pouches has been slowed in the US by regulatory requirements and stronger competition.

Pallav Mittal from Barclays said in a note reported by Reuters that the scale of the "broad-based" job reductions could surprise investors. BAT shares were down about 1.3 per cent in early Monday trading following the announcement.

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