BAT
BAT offices in Brazil.
How BAT Plans to Create a More Efficient and Focused Company A drastic reduction in force is the first step. From Staff Reports ritish American Tobacco (BAT) announced on September 12 that it would take steps to simplify its business and create a “more efficient, agile and focused BAT.” This will ensure the company 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 vapor, tobacco heating products and oral tobacco. To enable better focus on key growth areas; faster decision making; greater management accountability and the elimination of duplicative activities, the proposals will:
B
• • •
reduce layers of management; create fewer, more accountable business units; leverage its Global Business Services activities more effectively; and
•
simplify all key business processes and ways of working.
This program, scheduled for completion by January 2020, envisages a reduction of around 2,300 positions globally. With the focus on simplification and removal of management layers, it is expected that over 20 percent of the senior roles in the organization will be affected. A consultation process is now under way with all staff who will be impacted. Jack Bowles, BAT’s new Chief Executive, 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 organization and ensure a future fit culture. 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
28 TOBACCO INTERNATIONAL SEPTEMBER 2019
shareholders. This is a vital first move to help achieve these goals.” A program of this magnitude involves decisions that will be difficult. “But ultimately it is the right thing for our business.” He hoped that “BAT will be better placed to deliver on its target of generating £5 billion of revenues in New Categories by 2023/24 as a result of the program.” Response from investors was cautiously favorable. Bloomberg News analyzed the move by saying, “BAT has tempered the outlook for growth of smoking alternatives. The cost-saving program will help the company reach its goal of getting £5billion in revenue from new products by 2023 or 2024.” Russ Mould, investment director at AJ Bell investments, said, “[This] announcement represents a bold first step for new chief executive Jack Bowles. But he must hope the crackdown on vaping doesn’t see his growth ambitions run out of puff.” A Defense Against Underage Vaping On the same day that BAT’s reduction in force was announced, the chief marketing officer of BAT, Kingsley Jack Bowles, BAT CEO.
