TLDR
– German software company SAP SE has announced a restructuring plan worth 2 billion euros ($2.17 billion), affecting 8,000 positions in the company
– The restructuring plan is aimed at focusing on key growth areas, particularly AI-driven businesses.
SAP SE, a German software company, has revealed a restructuring plan worth 2 billion euros ($2.17 billion), affecting 8,000 positions, in order to enhance its focus on artificial intelligence (AI)-driven businesses. The company will mainly implement the program through voluntary leave schemes and internal re-skilling measures. SAP expects to exit 2024 with a headcount similar to current levels. The restructuring expenses are expected to impact operating profit, with the majority reflecting in H1 2024. SAP also plans to invest over $1 billion in generative AI through its AI-powered technology start-up, Sapphire Ventures.
In a separate announcement, SAP projected its 2024 cloud revenue to range between 17 billion euros and 17.3 billion euros. The company updated its 2025 outlook, forecasting adjusted cloud gross profit of approximately 16.2 billion euros. SAP’s key cloud business revenue at the end of 2023 was 13.66 billion euros, falling short of the forecasted 14.06 billion euros. The company plans to cut costs and focus on its cloud business.
This announcement follows SAP’s previous job cuts in January 2023, where the company planned to cut 3,000 jobs, or 2.5% of its global workforce, and explore the sale of its remaining stake in Qualtrics to focus on its cloud business.