Imperial Tobacco on Tuesday announced the closure of factories in Britain and France with the loss of 900 jobs, citing declining sales in Europe, tougher anti-smoking measures and the growth of contraband sales.
The two factories concerned are at Carquefou, near Nantes in western France, where 327 people are employed, and Nottingham in central England, which has 540 staff.
The company told unions at its French subsidiary Seita that a total of 366 jobs will go in France, where it employs 1,150 people, and 130 new jobs will be created in Poland.
The move means Gauloises, one of the most famous brands owned by Imperial, will be almost exclusively produced outside France.
The company's portfolio also includes Davidoff cigarettes, Golden Virginia loose tobacco and Rizla rolling papers.
In a statement, Imperial which employs 35,000 people in 160 countries, said it was undertaking "a number of restructuring projects to strengthen the group’s competitive position."
It said the measures, including the two factory closures, would be implemented over the next two years.
"The proposed closures reflect declining industry volumes in Europe, impacted by tough economic conditions, increasing regulation and excise and growth in illicit trade," the statement said.
"Production has been affected at the Nottingham and Nantes sites, which now utilise less than half their manufacturing capacity."
Imperial's chief executive, Alison Cooper, added: "These projects are an essential part of securing the sustainable future of the business.
"The prospect of job losses is always regrettable and we will be doing all we can to support employees and ensure that they are treated in a fair and responsible manner."
The company said the cuts would deliver savings of £300 million a year (360 million euros, $500 million) from September 2018.