German software giant SAP to restructure 8,000 jobs in push towards AI

NEW YORK – German software giant SAP unveiled a €2 billion (S$2.9 billion) restructuring plan covering 8,000 roles on Jan 23, as it seeks to better focus on growth in artificial intelligence-driven business areas.

SAP expects generative AI to fundamentally change its business and has pledged to invest more than US$1 billion (S$1.3 billion), while opening a new tab in AI-powered technology start-ups via its enterprise capital firm Sapphire Ventures.

The company said it plans the restructuring to help better focus on key growth areas such as business AI.

The restructuring programme would be implemented majorly through voluntary leave programmes and internal reskilling measures, the company said, adding that it expects to exit 2024 with a headcount “similar to the current levels”.

SAP has more than 105,000 employees, according to the company’s website.

The restructuring expenses would reflect mostly in the first half of 2024, impacting operating profit, the company said.

The business software maker, separately on Jan 23, also forecast 2024 cloud revenue at €17 billion to €17.3 billion and updated its 2025 outlook forecasting adjusted cloud gross profit of approximately €16.2 billion.

Its key cloud business revenue at 2023 end came in at €13.66 billion, falling short of its forecast of €14.06 billion.

The software firm had previously missed analyst expectations for cloud revenues in the third quarter. 

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