British American Tobacco (BAT) plans to reduce its workforce by 2,300 people as part of a restructuring program to simplify its business and create a more efficient, agile and focused organization.
The objective is to better position BAT to meet ever-evolving consumer needs and deliver savings that can be reinvested in the growth of its portfolio of new categories such as vapor, tobacco heating products and oral tobacco.
To enable better focus on key growth areas, faster decision making, greater management accountability and the elimination of duplicative activities, the proposals will reduce management layers, create fewer larger more accountable business units, better leverage its global business services activities and simplify all key business processes and “ways of working,” BAT announced in a statement.
The program, which is planned to be substantially complete by January 2020, envisages a reduction of around 2,300 roles globally. With the focus on simplification and removal of management layers, it is expected that over 20 percent of the senior roles in the organization will be affected.
A consultation process is now underway with all staff who will be impacted.
“Since taking on the role of chief executive five months ago, I have been clear that I wanted to make BAT a stronger, simpler and faster organization and ensure a future fit culture,” says Jack Bowles, chief executive.
“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. This is a vital first move to help achieve these goals.
“A program of this significance involves decisions that will be difficult for our people, but ultimately it is the right thing for our business.
“As a result, BAT will be better placed to deliver on our target of generating £5 billion [$6.22 billion] of revenues in new categories by 2023/24.”
BAT’s announcement follows reports of job cuts at Japan Tobacco International (JTI).
In early September, Swissinfo reported that JTI would reduce staff at its headquarters in Geneva, Switzerland, by a quarter over a three-year period as part of a program to make the business more competitive.