British American Tobacco’s new boss on Thursday outlined plans to cut 2300 jobs as the firm tries to adapt to customers ditching traditional cigarettes for vaping.
The FTSE 100 owner of brands such as Benson & Hedges and Lucky Strike said the lay-offs are expected to complete by January 2020.
BAT, which employs some 55,000 people, of which just under 2500 are in the UK, gave no breakdown of where the cuts will happen.
However, it said there will be a “focus on simplification and removal of management layers”. It is expected over 20% of senior roles will be affected.
The company, which expanded hugely via the 2017 purchase of US rival Reynolds American for $49 billion, said reducing headcount will help create savings that can be reinvested into new divisions such as vaping and chewing tobacco.
It wants to make £5 billion of sales from newer arms by 2023-24.
Like rivals, BAT has seen lower demand for cigarettes amid health concerns and higher taxes deterring customers.
Despite concerns about flavoured e-cigarettes, including from Donald Trump’s administration which is looking to ban them following an alleged spike in vaping-linked deaths, companies are planning to invest in them.
Chief executive Jack Bowles, who took over in April, said: “My goal is to oversee a step-change in new category growth and significantly simplify our current ways of working and business processes, whilst delivering long-term sustainable returns for our shareholders.”
Eamonn Ferry, an analyst at Exane BNP Paribas, said: “The tobacco industry is changing and BAT needs to change with it, which today’s announcement shows it is trying to do.”
