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British American Tobacco cuts 2,300 jobs under plan to ramp up e-cigarette push

British American Tobacco PLC said Sept. 12 it is cutting 2,300 jobs as part of a drive to cut costs and reinvest the funds into new category products such as vapor, tobacco heating products and oral tobacco.

The London-based tobacco products manufacturer expects to cut more than 20% of its senior staff as it looks to simplify and remove management layers to enable faster decision-making, greater management accountability and elimination of duplicative activities.

CEO Jack Bowles said that while the process will be "difficult for our people," it will place BAT in a better position "to deliver on our target of generating £5 billion of revenues in New Categories by 2023/24."

"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 shareholders," Bowles said in a statement.

"A program of this significance involves decisions that will be difficult for our people, but ultimately it is the right thing for our business."

The program is expected to be completed by January 2020. The tobacco products company has started a consultation process with all affected staff.

The U.S. is seeing a continued rise in the rates of youth e-cigarette use, with about 8 million adults and 5 million children using e-cigarettes, Secretary of Health and Human Services Alex Azar said Sept. 11, citing preliminary numbers from the National Youth Tobacco Survey.

However, e-cigarettes have come under heavy scrutiny in recent weeks in the wake of reports of deaths and diseases related to vaping.

The Trump administration Sept. 11 announced push to ban all non-tobacco flavored vaping products from the market. The White House move came days after the FDA blamed Juul Labs Inc. for an "epidemic of youth use" of its products and warned the company about making unauthorized health claims for its products.

On Sept. 12, BAT shares rose as much as 3.5% to £31.52 during morning hours on the London Stock Exchange.