British American Tobacco announced plans to cut approximately 9,000 jobs, a significant headcount reduction framed as a response to sustained volume declines in traditional combustible cigarettes. The company reported FY revenue of $25.6B, down 1.0% year-over-year, with a 30.3% net margin and diluted EPS of $3.49 — numbers that show profitability holding for now but a top line that is clearly under pressure.
The job cuts are the most visible sign yet that BTI is prioritizing margin preservation and cash generation over growth investment. The restructuring is expected to reduce the cost base materially, but the critical question is whether savings can offset the accelerating secular decline in combustible cigarette volumes across key Western markets.
BTI's bull case rests on its new categories portfolio — vapes, heated tobacco, and oral nicotine — which the company has flagged as growing segments. A leaner cost structure could also support the stock's historically elevated dividend yield, which is a core reason investors hold the name. Bears, however, point to the revenue trajectory: a 1% decline sounds modest, but with volumes falling faster in major markets and regulatory pressure on next-generation products intensifying globally, the top-line drag could accelerate before cost cuts can compensate.
What to watch: the pace of new-category revenue growth relative to combustible declines, any update to the dividend policy, and regulatory developments on vaping and heated tobacco in the US, UK, and EU. The restructuring timeline and one-off charges will also shape near-term earnings visibility.