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British American Tobacco (BAT) announced plans to cut 2,300 jobs by 2020 in readiness for a shift towards non-tobacco products a day after US President Donald Trump said that he was considering a ban on flavored e-cigarettes.
The vast majority of BAT’s £24.5bn revenue in 2018 came from traditional cigarettes, but the company said it could save money to invest in alternative products such as vaping equipment and heated tobacco by stripping out layers of management around the world.
The company declined to say how many of the job cuts would fall in the UK, where 2,500 of its 55,000 staff are based, including at its headquarters in London.
BAT’s Chief Executive, Jack Bowles, who took over this year after the eight-year tenure of Nicandro Durante, said he wanted to make the company “a stronger, simpler, and faster organization” that was ready for a future in which people moved away from cigarettes.
He said BAT aimed to derive £5bn of its revenue from what it called “new category” or “potentially reduced-risk products” by 2023 to 2024 financial year.
The U.S. is a large and growing market for BAT’s vaping products, led by its flagship brand, Vype. Out of the £1.8bn it already makes from products other than cigarettes, £318m comes from vaping products.
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