Philip Morris Shuts Richmond Office, Cuts 135 Jobs Amid Pivot to Smoke-Free Future
In a move underscoring the profound transformation of the tobacco industry, Philip Morris International (PMI) has notified Virginia state officials of plans to permanently close its Richmond office, resulting in 135 job losses. The layoffs, set to begin April 17, 2026, affect non-unionized employees, with the company stating a majority will be offered roles in other states.
The closure is a direct consequence of PMI's strategic shift away from traditional cigarettes. The company is consolidating its U.S. operations around "smoke-free" nicotine alternatives, particularly the ZYN pouches it gained through its $16 billion acquisition of Swedish Match in 2022. This pivot was further formalized on January 1, 2026, with the creation of two new business units: PMI International and PMI US.
Financially, the strategy has been a winner with investors. PMI's stock surged 37% over the past year, buoyed by strong quarterly earnings where smoke-free products were highlighted as a key growth driver. The company is scheduled to report Q4 earnings on February 6, with analysts anticipating revenue of $10.4 billion.
The broader context is a decades-long decline in cigarette smoking. CDC data shows the adult smoking rate in the U.S. has plummeted from 42.4% in 1965 to 11.6% in 2022. PMI is betting its future on capturing this shifting market with products it claims, while not risk-free, are "a far better choice than cigarette smoking." Its smoke-free portfolio is now in over 100 markets.
However, the road is fraught with regulatory hurdles. PMI is currently seeking FDA authorization to market ZYN as a modified risk tobacco product. Simultaneously, it faces potential new taxes, as New York Governor Kathy Hochul proposes applying a 75% wholesale tax—equivalent to cigarettes—to nicotine pouches.
Analyst sentiment reflects these challenges. Jefferies' Edward Mundy recently downgraded PMI stock from "Buy" to "Hold," citing increased competition from British American Tobacco in pouches and Japan Tobacco in heated tobacco.
The Richmond cuts follow a similar pattern in Europe, where PMI shuttered cigarette plants in Berlin and Dresden in late 2024, eliminating 372 jobs.
Michael R., Business Analyst, Richmond: "This is a painful but predictable consolidation. PMI's future is ZYN and heated tobacco. The Richmond office, tied to legacy structures, doesn't fit that future. The financials clearly justify the strategic direction, even if the human cost is real."
Sarah Chen, Public Health Advocate: "It's corporate cynicism at its finest. They're shedding jobs in one state while pushing addictive nicotine pouches with dubious health claims elsewhere. Calling ZYN a 'better choice' is a marketing ploy to hook a new generation. The FDA must reject their modified risk application."
David P., Former PMI Supply Chain Manager: "I saw this coming. The internal focus has been entirely on smoke-free for years. The writing was on the wall when HQ moved to Connecticut. For the workers getting offers out-of-state, it's a major life disruption. The 'alternative positions' aren't always a perfect match."
Lisa G., Retail Stock Analyst: "The downgrade by Jefferies is a caution flag. The smoke-free growth story is priced in. Now they need to execute flawlessly against stiff competition and navigate a regulatory minefield. The next few earnings calls will be critical."
This story was originally reported by TheStreet on February 1, 2026.