On February 12th, Japan Tobacco Company (JT) said on Tuesday that after predicting an unexpected decline in profits this year, it plans to cut about 1,000 jobs and will focus on winning non-burning (HnB) products such as Ploom S. Market share.
According to data from Refinitiv, operating profit in 2021 is expected to fall by 23% to 363 billion yen (approximately US$3.46 billion), while the market expects a slight rebound to 476 billion yen. Despite occupying more than half of the domestic cigarette market, JT lags behind rival Philip Morris in the increasingly popular HNB product category.
The company said that due to the decline in sales of traditional cigarettes, it intends to lay off about 1,000 employees and provide voluntary and early retirement plans. At the same time, it said it would strengthen its investment in so-called risk reduction products, including the non-burning Ploom that competes with Philip Morris' IQOS.
It plans to launch a new electric heating rod product later this year to improve its position in Japan. Japan is the world's largest market for such products, and ordinary e-cigarettes containing nicotine-containing e-liquid are prohibited.
Masamichi Terabatake, President and CEO of JT Group, said in a press release that Japan’s harm reduction category is the most mature and competitive category in the world. Reflecting this and the decline in sales in recent years... we had to make some difficult and necessary decisions.