SAP to restructure 8,000 roles in push towards AI
(Reuters) -German software firm SAP SE (ETR:SAPG) unveiled on Tuesday a 2 billion euro ($2.2 billion) restructuring programme for 2024 that will affect 8,000 roles, as it seeks to better focus on growth in artificial intelligence (AI)-driven business areas.
SAP said that it expects generative AI to fundamentally change its business and has pledged to invest more than $1 billion by backing AI-powered technology startups through its enterprise capital firm Sapphire Ventures.
Chief Executive Christian Klein said the programme would allow SAP to continue to develop pioneering innovations while at the same time improving the efficiency of business processes. The restructuring programme would be implemented primarily through voluntary leave programmes and internal re-skilling measures, the company said, adding that it expects to exit 2024 with a headcount «similar to the current levels».
Tech companies including global giants such as Google (NASDAQ:GOOGL) and Microsoft (NASDAQ:MSFT) have embarked on a wave of layoffs in recent months as they look to shift their focus to artificial intelligence software and automation to lighten workloads.
SAP has more than 105,000 employees, according to the company's website.
The restructuring costs would reflect mostly in the first half of 2024, with the programme expected to have a minor impact in 2024 but contribute 500 million euros to operating profit in 2025 due to efficiency improvements, according to the company.
Shares in SAP were up 1.6% in Lang & Schwarz pre-market trade on Wednesday.
STRONG OUTLOOK
The business software maker, separately on Tuesday, forecast double-digit percentage growth in revenue from its key cloud business and overall operating profit for the current year
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