Thousands of jobs to go at tobacco firm BAT as focus turns to vapes

August Graham, PA Business Reporter
·2 min read

The boss behind the Lucky Strike and Dunhill cigarette brands has said that thousands of jobs at the company’s traditional business will be lost in the coming years as the firm focuses on vapes and other new products.

British American Tobacco (BAT) chief Jack Bowles also said that sanctions are making it more difficult to sell the Russian part of the business.

He was speaking as BAT reported a 7.7% rise in revenue to £27.7 billion in 2022. Revenue from its new categories business, which includes vapes and other tobacco alternatives, rose 41% to £2.9 billion.

BAT hopes to reach £5 billion in revenue from the new category unit by 2025. The business also said the new category unit would be profitable next year, ahead of plan.

Revenue from BAT’s new categories business, which includes vapes and other tobacco alternatives, rose 41% to £2.9 billion (Alamy/PA)
Revenue from BAT’s new categories business, which includes vapes and other tobacco alternatives, rose 41% to £2.9 billion (Alamy/PA)

But the pivot towards these new forms of technology will also mean fewer jobs for the old side of the business.

Mr Bowles told the PA news agency that thousands of people will lose their jobs at the company within the next few years, but he is also recruiting others for the new categories business.

“We have to adapt our structure as we go along, and we have to make sure that we hire a lot of new capabilities and a lot of new people,” he said.

He added: “In the course of the next two years a few thousand people will have to go because we continue to reorganise and optimise.”

The cigarette-maker said in March 2022, shortly after the Kremlin ordered tanks towards Kyiv, that it would get out of both Russia and Belarus.

But in a report to shareholders on Thursday the company said that – while it is in “advanced discussions” – it had not yet sealed a deal to sell the business.

“There are sanctions in Europe, there are sanctions in the UK, there are sanctions in the US and there are regulations in Russia,” Mr Bowles said.

“All this makes it extremely complicated when you have an establishment which includes factories and a sales force.

“If you’re just a retailer you can move it on the back of an envelope and write off the whole thing.

“When you have the brands, the distribution, the manufacturing and the sanctions from different bodies, then you need to make sure you do things properly.

“We want to exit Russia, it takes time. To give you an idea, all the countries that we went out of in the past few years took up to two years, and they were far less complex than this one. Frankly speaking we’re going at speed.”

Asked if he would give the profits that BAT made in Russia and Belarus in the meantime to charity, Mr Bowles said that those profits would be wiped out by the sale.

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