One of world’s largest tobacco companies to fire 20% employees:Cigarette sales fall on ga lobal level

London-based British American Tobacco, one of the world’s largest tobacco companies, is going to cut approximately one-fifth or about 20% of its total 47,000 employees this year. The company has announced that it will eliminate 5,500 jobs and outsource 3,500 other positions by the end of this year to reduce costs and become technology-enabled, affecting a total of 9,000 employees. This FTSE 100 company is currently facing declining demand for traditional cigarettes and pressure to increase investment in other nicotine alternatives (such as vapes and pouches). Target of Annual Savings of 600 Million Pounds CEO says- We are building a future-ready organization BAT’s Chief Executive Officer (CEO) Tadeu Marroco said that they are building a future-ready organization, which is more agile, cost-disciplined and technology enabled. Many of our colleagues are being affected by these changes and we are focused on supporting them with care and respect during this transition, as we prepare the business for the future. No Layoffs in America, Accenture Will Handle Work The company has clarified that there will be no layoffs in its business in America, where it operates under its subsidiary Reynolds American. Last year, BAT had partnered with technology consultancy company Accenture to outsource some of its work. CEO Marroco had said at that time that this deal would give the company access to Accenture’s advanced AI solutions (Artificial Intelligence Solutions). According to BAT, since this deal, some jobs in the UK, Poland, Romania, Costa Rica, Mexico, Singapore, and Malaysia have been taken over by Accenture. Preparing to Make Business Digital and AI-Focused Global cigarette volume estimated to decline by 2.5% The group has estimated that the global cigarette industry volume will decline by approximately 2.5% this year. This is why the London-listed and headquartered company is now investing heavily in smoke-free products such as Vuse vapes and Velo nicotine pouches. The company had informed investors at the beginning of this month that revenue growth in this ‘new categories’ segment of the business is accelerating and is expected to grow by around 15% this year. BAT and competitor companies’ shares fell on Monday In early trading on Monday, BAT’s shares recorded a decline of approximately 1.4%, although year-to-date this year, its shares are up about 11.8%. The impact of BAT’s decision was also visible on other companies in the market, and in early trading, shares of its competitor company Imperial Brands also fell by up to 1%. What is FTSE 100 and outsourcing? FTSE 100: It is also called ‘Footsie’. It is a share index of the 100 largest companies by market cap listed on the London Stock Exchange (LSE), similar to Sensex or Nifty in India. Outsourcing: When a company does not do some of its internal work or business process itself but assigns it to an external expert company, it is called outsourcing. This helps companies reduce their costs and use advanced technology (like AI).