BAT cuts 9,000 jobs to save £600m, launches buyback
New share buyback announced BAT said it will launch another share buyback during its closed period before July 30 half-year results. Buybacks reduce the number of shares, which can lift the value of those remaining. The stock rose 2% on the news.
Directly explains a positive price move and shows management's confidence.
9,000 job cuts under Fit2Win BAT is cutting 9,000 jobs (5,500 directly, 3,500 outsourced) to save £600m a year by 2028. Cost savings can boost future profits, but the upfront costs and weak cigarette demand weigh on sentiment. The stock fell 2% on the day.
This is the main new event and explains both the cost-saving upside and the demand-driven downside.
Weaker traditional cigarette demand The restructuring is driven by falling demand for traditional cigarettes. BAT is investing more in smoke-free products like Vuse vapes and Velo pouches, aiming for over half of revenue from these alternatives. The shift pressures current sales but is necessary for long-term growth.
Highlights the underlying demand problem that forces the restructuring and affects future revenue.