This will be the tobacco product manufacturer’s third retrenchment exercise in Malaysia over the past decade. The company has 283 employees, according to its 2024 annual report.
The exercise is due to the start of its new route-to-market distribution model on July 1, it said in an exchange filing today.
“Workforce optimisation is included as part of the company’s operational efficiency initiative and intended to align the workforce with future operating requirements and business direction,” it said.
The country’s largest tobacco company assured the workforce optimisation will be conducted in compliance with applicable labour laws and regulations.
Affected employees will receive their statutory and contractual entitlements, including retrenchment benefits, where applicable, it added.
The impending layoffs come amid rising regulatory pressures on Malaysia’s tobacco industry in recent years. A nationwide ban on the sale and use of vapes is being planned this year, starting with disposable products, according to news reports.
Last year, the government announced a 42.8% hike in excise duty, the first increase in a decade, on tobacco and heated tobacco products under Budget 2026.
New pictorial health warnings were mandated on cigarette packaging, and retail display of cigarettes were also banned.
In 2024, the Control of Smoking Products for Public Health Act came into force, prohibiting the sale of cigarettes to those born on or after Jan 1, 2007.
In 2016, the company announced it would close its factory in Petaling Jaya and retrench 230 workers in a restructuring necessitated by falling sales due to high excise duties. Operations at the factory ceased in 2017, and the land was eventually sold off.
The company initiated another round of “internal reorganisation” in late 2019, with 20% of its 500-strong workforce in Malaysia being laid off.
BAT said the exercise was necessary given challenging market conditions, driven by high levels of illegal cigarettes, a hike in sales and service tax, and rapid increase in illegal vaping products.
The global tobacco group has a history of more than 100 years in Malaysia going back to 1912. BAT was formed from the merger of Rothmans of Pall Mall (Malaysia) Bhd and Malaysian Tobacco Company Bhd in 1999.
Its brands include Dunhill, Benson & Hedges, Peter Stuyvesant, Rothmans, KYO and Luckies.
BAT shares closed 1 sen or 0.2% higher at RM5.60, valuing the group at RM1.6 billion.