JOHANNESBURG – British American Tobacco (BAT) jumped 3 percent on Thursday after the tobacco giant announced that it planned to reduce 20 percent of senior roles as part of a plan to simplify the organisation and cut costs.
BAT, the world’s second-biggest tobacco producer after Philip Morris, told shareholders that, by January next year, it envisaged cutting about 2 300 roles globally on mounting debt and the looming ban of vaping and e-cigarettes in the US, which is expected to weigh heavily on the prospects of the tobacco industry.
BAT said the headcount reduction would help it to deliver savings that could be reinvested in the growth of new products, including vapour, tobacco-heating products and oral tobacco.
Chief executive Jack Bowles said downsizing was a vital move to ensure that the company was simplified.
“Since taking on the role of chief executive five months ago, I have been clear that I wanted to make BAT a stronger, simpler and faster organisation, and ensure a future fit culture. My goal is to oversee a step change in new category growth and significantly simplify our current ways of working and business processes, whilst delivering long-term sustainable returns for our shareholders,” said Bowles.