British American Tobacco, one of the world’s largest tobacco companies based in London, is going to cut about one fifth of its total 47,000 employees this year, or about 20%. The company has announced that it will eliminate 5,500 jobs and outsource another 3,500 positions by the end of this year to reduce costs and become technology enabled, affecting a total of 9,000 employees. The FTSE 100 company is currently facing declining demand for traditional cigarettes and pressure to increase investment in other nicotine alternatives (such as vapes and pouches). Target of saving 600 million pounds annually CEO said – We are building a future-ready organization BAT’s Chief Executive Officer (CEO) Tadeu Marrocco said that we are building a future-ready organization, which is more agile, cost-disciplined and technology enabled. These changes are impacting many of our associates and we are focused on supporting them with care and respect during this transition as we prepare the business for the future. No layoffs in America, Accenture will handle the work. The company has clarified that there will be no layoffs in its business in America, where it operates under its subsidiary Reynolds American. Last year, BAT partnered with technology consultancy company Accenture to outsource some of its work. CEO Marrocco had said at the time that this deal would give the company access to Accenture’s advanced AI solutions (Artificial Intelligence Solutions). According to BAT, since this deal, some jobs have been taken by Accenture in UK, Poland, Romania, Costa Rica, Mexico, Singapore and Malaysia. Preparation to make the business digital and AI-focused. Global cigarette volume is expected to decline by 2.5%. The group has estimated that the volume of the cigarette industry will decline by about 2.5% at the global level this year. That’s why this London-listed and headquartered company is now investing heavily in smoke-free products such as Vues Vapes and Velo Nicotine Pouches. The company had told investors earlier this month that revenue growth in this ‘new categories’ part of the business is accelerating and it is expected to grow around 15% this year. Shares of BAT and competitor companies fell on Monday. BAT shares fell by about 1.4% in early trading on Monday, although its shares are up about 11.8% so far this year (year-to-date). The impact of BAT’s decision was also seen on other companies in the market and shares of its competitor company Imperial Brands also fell by 1% in early trading. What is FTSE 100 and outsourcing? FTSE 100: Also known as ‘Footsie’. It is a stock index of the 100 largest companies by market cap listed on the London Stock Exchange (LSE), similar to the Sensex or Nifty in India. Outsourcing: When a company hands over any of its internal work or business process to an external expert company instead of doing it itself, it is called outsourcing. This helps companies reduce their costs and use advanced technology (such as AI). Also read this news… Silver increased by ₹ 5,059 to reach ₹ 2.22 lakh kg: 24 carat gold became costlier by ₹ 2,038 to 1.42 lakh, this year the price increased by ₹ 9 thousand. There is an increase in the prices of gold and silver on June 29. According to India Bullion and Jewelers Association (IBJA), 1 kg silver has increased by Rs 5,059 today to reach Rs 2.22 lakh. At the same time, 10 grams of 24 carat gold has become costlier by Rs 2,038 today and has come to Rs 1.42 lakh. Earlier it was at Rs 1.40 lakh. Read the full news…
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British American Tobacco to lay off 9,000 employees this year: Takes steps to reduce expenses and adopt AI; Global cigarette volume estimated to decline by 2.5%
