British American Tobacco PLC (BATS) is planning to streamline its operations by reducing its workforce and outsourcing roles, targeting a reduction of nearly one-fifth of its staff to cut costs and improve operational efficiency.

The tobacco giant, known for brands like Lucky Strike and Kent, announced on Monday its intention to eliminate approximately 5,500 jobs by the end of this year. Additionally, around 3,500 positions will be outsourced to service partners, including Accenture (ACN). According to the company's official website, British American Tobacco PLC currently employs about 47,000 people globally.

The company stated that its supply chain operations in the United Kingdom and Singapore, along with certain roles within its global business services centers located in Costa Rica, Mexico, Poland, Romania, and Malaysia, will be transferred to be managed by Accenture.

It was also revealed that the company has been consolidating its manufacturing footprint over the past two years, which included the closure of a production facility in Heidelberg, South Africa.

These workforce and operational adjustments are part of a broader restructuring initiative launched by British American Tobacco PLC last year. The company's goal is to achieve annualized savings of approximately £600 million (equivalent to $792.1 million) by 2028, with current optimization efforts reportedly progressing as planned.