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BAT unveils plans to cut 2,300 jobs

Jack Bowles, BAT’s new chief executive, said the plans would likely affect around 20% of the company's senior roles

British American Tobacco PLC - BAT unveils plans to cut 2,300 jobs
BAT is looking to shift focus towards its New Categories arm, which sells e-cigarette products such as Glo

British American Tobacco PLC (LON:BATS) has unveiled plans to cut 2,300 jobs as part of restructuring plans to simplify its business.

In a brief update on Thursday, the FTSE 100 tobacco firm said its proposals would reduce management layers, create fewer but larger and more accountable business units, “better leverage” its global business services activities and simplify all of its key business processes.

READ: Morgan Stanley warns potential law changes could stub out half of British American Tobacco's US profits

BAT said the programme was planned to “substantially complete” by January next year, adding that with the focus on management layers around 20% of senior roles would be affected.

Jack Bowles, BAT’s chief executive who joined the firm five months ago, said he aimed to “significantly simplify” the group’s working and business processes and the new strategy was “a vital first move”.

He added that while the programme would involve “difficult” decisions, it was ultimately the right move for the business and would leave the company “better placed” to deliver on its targets going forward.

BAT is aiming to generate £5bn in revenues in its New Categories division, which includes vaping and e-cigarettes, by 2023/24.

In a note, analysts at Liberum said the plans for job cuts were a sign of current “underperformance” in the group, but while the exodus of senior management would result in some “brain-drain”, the broker said it could be worth it if it helped the firm hit its revenue target.

Investors seemed to take the news in their stride, with the shares rising 2.8% to 3,126.5p.

Quick facts: British American Tobacco PLC

Price: 2998 GBX

LSE:BATS
Market: LSE
Market Cap: £68.77 billion
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