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BAT's AI Overhaul: Job Cuts Loom
12 Feb
Summary
- British American Tobacco plans job cuts and AI integration.
- Cost-saving program targets £600 million by 2028.
- New categories revenue grew 5.5% with strong Velo sales.
British American Tobacco (BAT) is undergoing a strategic transformation, focusing on operational simplification through job cuts and enhanced AI integration. These moves are intrinsically linked to the company's 'Fit2Win' program, launched last year with the objective of achieving substantial cost reductions.
The program is designed to secure around £600 million in savings by the close of 2028. In its latest financial update, BAT reported a marginal 1% decrease in total revenues for 2025, amounting to £25.6 billion.
However, revenues from BAT's new categories demonstrated robust growth, rising by 5.5% to £3.62 billion. This expansion was largely propelled by a surge in demand for its Velo oral nicotine products, with the modern oral business showing a significant 47.4% year-on-year increase. This success helped to counteract a decline in vaping revenues.
Chief executive Tadeu Marroco expressed satisfaction with the company's performance, highlighting an accelerating momentum that is expected to enable full-year delivery at the upper end of guidance. He affirmed confidence in achieving the company's mid-term financial targets from 2026 onwards and reiterated a commitment to delivering sustainable shareholder value through progressive dividends and share buy-backs, including a £1.3 billion program for 2026.
