British cigarette maker British American Tobacco (BAT) announced on Thursday the removal of 2,300 jobs worldwide to adapt to changing consumer habits and the rise of electronic cigarettes.
The group, one of the world's heavyweights in a sector facing declining sales volumes of traditional cigarettes, announced in a statement that the restructuring plan will be completed by January 2020.
The planned job cuts represent less than 5% of the total workforce of the group, which has some 55,000 employees worldwide.
BAT, known for its brands Lucky Strike, Dunhill, Kent and Rothmans, says it intends to simplify its organization and have fewer hierarchical levels. This will reduce staffing by approximately 20% of the positions of responsibility.
The group says it wants to better support new consumption patterns, as people in developed countries tend to reduce their consumption of cigarettes, and save money to invest more in new products like e-cigarettes.
This restructuring is the first major step taken by new General Manager Jack Bowles, who has been in office since April.
"My goal is to change things to grow the category of new products and significantly simplify our way of working while ensuring a long-term return on investment for our shareholders," says BAT boss in the release.
He added that this plan should make it easier for the group to reach its goal of a turnover of 5 billion pounds by 2023-2024 in new products.
The job cuts plan comes at the same time that, at the end of August, two of the world's largest tobacco companies, Philip Morris International and Altria, announced talks to re-emulate the inexorable drop in cigarette sales ten years after their separation.
BAT, under the era of Nicando Durante, predecessor of Mr. Bowles, had meanwhile significantly increased its presence in the United States via the acquisition of Reynolds American, closed in the summer of 2017 for nearly 50 billion dollars.
This giant acquisition of the 57.8% stake in Reynolds that it did not yet have not only allowed BAT to take under its aegis the brands Camel and Newport, but also to become a major player in the electronic cigarette.
Coincidentally, BAT's press release comes a few hours after the Donald Trump government's decision to ban the sale of flavored electronic cigarettes in the coming months, to thwart their growing success in US colleges and high schools.
© 2019 AFP