The second-largest tobacco company in the world, British American Tobacco (BAT) has disclosed its plans to lay off 2,300 workers globally by January 2020.
According to a report, the decision was made in order to drive revenue and deliver long-term sustainable returns for the company’s shareholders.
In a statement, the BAT’s Chief Executive Officer (CEO) Jack Bowles said, “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. This is a vital first move.”
What you should know: This announcement came one day after the administration of United States President, Donald Trump said it would soon ban flavoured e-cigarette products. The administration took the decision to ban e-cigarettes because of the rise in the deaths of youths using the product.
More reasons: Due to the plan to ban e-cigarettes, BAT and similar tobacco companies are looking for alternative revenue streams in the Western markets. The traditional tobacco products are not an option because public smoking bans and health worries have discouraged consumers into buying them.
This is why BAT has decided to cut down jobs in order to make up for the falling demand in the products. Bowles stated that the job cuts would only affect workers holding senior positions because they were better placed to deliver £5.0 billion ($6.2 billion, 5.6 billion euros) in new category revenues by 2024.
British American Tobacco expressed sympathy for those who would be affected by the decision but reinstated that this action was crucial for the survival of the business.
According to the British American Tobacco, the latest restructuring would ensure that BAT is better placed to meet ever-evolving consumer needs and deliver savings that can be reinvested in the growth of its portfolio of new categories such as vapour, tobacco heating products and oral tobacco.
Why this matters: It is of general knowledge that the British tobacco firm has an operational presence in Nigeria. While the company did not specify which of its subsidiaries would be affected by the job cut, some of the Nigerians working in their Ibadan and Lagos offices might be affected in this exercise.