Skip to navigationSkip to main contentSkip to right columnADVERTISEMENTChris PriceMon, June 29, 2026 at 2:23 PM GMT+2 2 min readBritish American Tobacco seeks to cut £600m of costs - Nick Ansell/PALucky Strike and Dunhill maker British American Tobacco (BAT) is to cut 9,000 jobs as vapes replace cigarettes worldwide.BAT will cut 5,500 roles by the end of the year and outsource another 3,500 roles as it seeks to cut £600m in costs by the end of 2028.The decision to axe a fifth of its 47,000-strong workforce comes as the company presses ahead with the closure of a factory in South Africa, which it blamed on competition from illicit trade.Jobs in the UK will also be affected. The company said on Monday that a number of roles in Britain, Costa Rica, Mexico, Poland, Romania, Malaysia and Singapore have been outsourced to Accenture.Like other cigarette-makers, BAT is battling a drop in demand for cigarettes and other tobacco products. Smoking in the UK has fallen by a quarter since 2019, according to the Office for National Statistics.Revenues at BAT fell 1pc to £25.6bn last year, even as it added 4.7 million consumers to its "smokeless" brands such as vapes and nicotine pouches.BAT has set a goal to have more than half of its revenue come from smoke-free products by 2035. Its smoke-free brands include vape Vuse and Glo, a heated tobacco product.However, the company faces intense competition in the vape market from challenger brands such as Lost Mary.Tadeu Marroco, the chief executive of BAT, said the cost-cutting would help the company become "a future-ready organisation that is more agile, cost disciplined and technology enabled".BAT said it had expanded its partnership with ITC Infotech, an Indian technology company, and would be outsourcing roles to it in Poland and Romania.Mr Marroco said: "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."Whether through strategic partnerships or a more focused operational footprint, we are creating a simpler, faster BAT."In February, Javed Iqbal, the interim chief financial officer, said that the use of AI and data-analytic tools would affect staffing levels.BAT shares fell as much as 1.9pc on the London Stock Exchange.Pallav Mittal, an analyst at Barclays, said: "Whilst the market has been aware of this saving programme, we think the scale of this workforce reduction is unexpected and could come as a surprise to investors."Try full access to The Telegraph free today. Unlock their award-winning website and essential news app, plus useful tools and expert guides for your money, health and holidays.Terms and Privacy PolicyEU DSA contactPrivacy & Cookie SettingsMore Info