Kenneth Afor with agency report
The world’s second-largest tobacco company, British American Tobacco (BAT) announced on Thursday that it will lay off 2,300 of its workers by January 2020, about 4 percent of its global workforce.
The announcement is coming after Jack Bowles, BAT’s new chief executive officer, initiated new business models that will be adopted by the company as traditional cigarette smoking continues to slide downward.
The company also revealed that more than 20 percent of its senior staff will be affected as it looks to eliminate duplicate roles and merge some of its business units.
Bowles hinted that BAT would focus on new smoking options such as e-cigarettes across its sister companies, Lucky Strike and Dunhill.
The company’s “New Category” business model, under the new chief executive, announced some of its new heating products such as glo, Vype e-cigarettes, snuff, and nicotine pouches.
With these new business models, BAT hopes to generate $6.2 billion by 2024 adding that customers will witness less complexity and faster decision making in response to new trends.
Similarly, the glo and Vype e-cigarettes will be launched this month in Japan as it looks to close rank with Philip Morris International Incorporated, the market world leader after acquiring its United States (US) rival, Reynolds American for $49 billion in 2017.
However, BAT has over 55,000 workers globally according to its 2018 annual report.
Bowles reiterating his plans for BAT said, “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.
“My goal is to oversee a step change in New Category growth,” said Bowles, who took charge in April.”
Meanwhile, the major contention for BAT would be on how it would cope with the directive from Donald Trump who ordered on Wednesday that all sweet flavoured e-cigarettes should be removed from shop shelves which have led to drawing millions of children into nicotine adoption coupled also with the health concerns associated with smoking.