TobaccoReporter logo

Tag: layoffs

  • BAT to Shut Down Only South African Plant

    BAT to Shut Down Only South African Plant

    BAT South Africa (BATSA) announced it will cease local production of factory-manufactured cigarettes and close its sole manufacturing facility in Heidelberg, Gauteng, by the end of 2026, citing the overwhelming growth of illicit cigarettes in the market. The company estimates that illegal products now account for about 75% of cigarette sales in South Africa, rendering local manufacturing commercially unviable. The plant is currently operating at just 35% of capacity due to sustained volume losses linked to the illicit trade.

    “We have tried everything to ensure we don’t have to close this facility, which has been a part of the Heidelberg community since 1975, including implementing various efficiency initiatives over the years,” said Johnny Moloto, head of corporate and regulatory affairs at BAT Sub-Saharan Africa.  “But when three-quarters of your market is illicit, there’s a limit to what any company can do. We’ve reached that limit.”

    BATSA said the closure will directly affect approximately 230 employees and their families and will also have knock-on effects across the local value chain, including suppliers, logistics providers, and contractors in the Lesedi community. The company has initiated a formal consultation process with employees and unions in line with labor law and expects this process to conclude by the end of March 2026, ahead of the full shutdown later in the year. Despite the closure, BATSA stressed it is not exiting South Africa and will transition to an import-based supply model to continue serving adult consumers.

    The company said it has spent more than a decade engaging with government and law-enforcement authorities, warning that policy decisions such as the 2020 tobacco sales ban, above-inflation excise increases, and proposed new tobacco legislation have widened the gap between legal and illegal products. BATSA argued that enforcement efforts have been insufficient to protect legitimate businesses and jobs, with illicit cigarettes costing an estimated R28 billion ($1.7 billion) a year in lost tax revenue. BATSA also warned that illicit trade is increasingly affecting other sectors, including alcohol, pharmaceuticals, and consumer goods.

    The growth of illicit trade accelerated after a Covid-era ban on tobacco sales in 2020, from which BATSA says the legal market never recovered. BATSA said it could reconsider local manufacturing if there is sustained progress in curbing illicit trade but cautioned that proposed new tobacco legislation and rising excise duties risk further worsening the problem.

  • BAT to Cut 59% of Jobs from Belgium Facility

    BAT to Cut 59% of Jobs from Belgium Facility

    Yesterday morning (January 14) at a special works council meeting, BAT Belgium announced plans to cut up to 51 of its 87 jobs at its Groot-Bijgaarden facility as part of a proposed restructuring driven by mounting regulatory and economic pressures, according to Retail Detail. The company said it has initiated a collective redundancy procedure, with 48 of the 74 roles in its commercial unit and three of 13 positions in other departments potentially affected, subject to consultations with social partners.

    According to BAT, increasing regulation, bans on certain nicotine products, rising excise duties, and the expansion of the illegal tobacco market have led to a sustained erosion of revenue and weighed heavily on business performance. The company said the restructuring aims to create a more efficient and agile organization in response to these challenges.

  • Gudang Garam Denies Layoff Rumors Amid Financial Strain

    Gudang Garam Denies Layoff Rumors Amid Financial Strain

    Indonesian cigarette producer PT Gudang Garam has strongly denied claims of mass layoffs at its Kediri and Tuban factories. Over the weekend, a viral video showing hundreds of PT Gudang Garam Tbk employees shaking hands in what appeared to be an emotional farewell sparked layoff rumors. Adib Musyafa, head of human resources at the Tuban plant, called those rumors false and the video misleading, confirming that all 850 employees remain active, and no layoffs have occurred. He clarified that routine performance evaluations do not automatically lead to dismissals, urging the public to rely on official company statements.

    The Indonesian Trade Union Confederation (KSPI) picked up on the video and said it was verifying the reports and warned of potential ripple effects across the supply chain, which added to the validity of the rumor.

    The company reportedly saw an 82% drop in net profit in 2024 and its stock drop 33.7% this year, pointing to the financial pressures of higher excise taxes, falling sales, and competition from illegal cigarettes, but insists that mass workforce reductions have not taken place.

  • Dem Lawsuit Wants HHS “Restructure” Undone

    Dem Lawsuit Wants HHS “Restructure” Undone

    A group of Democratic-led states filed a lawsuit today (May 5) to challenge the Trump administration’s decision to fire 10,000 U.S. Department of Health and Human Services employees. Filed in federal court in Providence, Rhode Island, attorneys general from 19 states and the District of Columbia said the job cuts and agency consolidations U.S. Health and Human Services Secretary Robert F. Kennedy announced in late March unconstitutionally stripped the department of the resources necessary to do its job.

    The layoffs, in addition to earlier buyout offers and firings of probationary employees, reduced the number of full-time HHS employees from 82,000 to 62,000 and left key offices unable to perform statutory functions, the lawsuit said.

    As part of the restructuring plan, HHS said it was also collapsing 28 divisions into 15 and closing half of its 10 regional offices.

    The states argue that Kennedy lacked the authority to launch the widespread layoffs and restructuring and that the administration violated the U.S. Constitution by usurping Congress’ authority to create and fund agencies’ operations. The states asked a judge to block HHS from implementing Kennedy’s plan announced on March 27, prevent the department from being dismantled, and force the administration to restore health

    HHS declined to comment on the lawsuit. It previously said the restructuring was necessary to streamline its functions and that the layoffs would save taxpayers $1.8 billion annually.