British American Tobacco PLC is expecting to cut jobs as it increases use of artificial intelligence as part of efforts to cut costs.
The FTSE 100 maker of cigarettes, vaping devices and nictine pouches announced the AI-driven productivity programme alongside its annual results on Thursday where it reported £10 billion of profit and £6.3 billion of cash flow.
Interim finance chief Javed Iqbal said the programme will allow the London-headquartered group to streamline operations with increased automation of more routine tasks using data analytics and AI tools.
He said these efforts to "simplify" operations would affect staffing levels.
“It will have an impact on the size of the organisation,” Iqbal told reporters on a call, per Reuters.
He added it was too early to estimate how many staff would be affected by the automation and AI-driven changes.
Shares in BAT fell 1.9% to 4,341p by lunchtime on Thursday.
Mark Crouch, market analyst for eToro, said: “For a business many assumed was in structural retreat, British American Tobacco continues to confound expectations. Profits rose 2.3% and operating margins remain robust, even as revenue slipped 1%."
He added: "For all the talk of terminal decline, tobacco products remain an extraordinarily efficient cash generator."
"Cash generation softened and free cash flow dipped, a point investors will not ignore. Yet with shares at an eight-year high, a dividend increase and fresh buybacks announced for 2026, the market appears willing to fund the transition, and be paid handsomely while it unfolds."