Multinational German software company, SAP, has revealed its comprehensive restructuring plan for 2024 involving voluntary redundancies or job changes for 8,000 employees.

The move is aimed at reshaping the company and positioning it for faster growth, driven in part by AI and a commitment to becoming more cloud-centric.

In an official statement released on Tuesday (23 January), SAP provided assurance that despite the restructuring, the company’s overall headcount is expected to remain unchanged by the end of the year.

With approximately 108,000 full-time employees at the close of 2023, the restructuring plan impacts over seven percent of the company’s workforce.

This restructuring initiative comes as part of SAP’s broader efforts to adapt to industry trends and market demands.

The software giant is particularly keen on leveraging AI to fuel its growth. After a five percent year-on-year revenue increase in the fourth quarter, SAP is making efforts to navigate the challenges posed by higher interest rates and economic uncertainties, which have led to industry-wide layoffs since late 2022.

Last year, SAP had already announced the elimination of 3,000 roles as part of its ongoing efficiency measures.

The downsizing trend appears to be a wider industry phenomenon in 2024, with major tech players like Alphabet and Amazon also announcing layoffs this month.

The widespread adoption of generative AI (GenAI) and a flurry of regulatory setbacks have played a big role in shaping these workforce decisions.

The launch of ChatGPT in late 2022 has made GenAI the most talked-about technology theme of 2023 and the global AI market will grow significantly in the next few years, according to GlobalData’s Thematic Research: Artificial Intelligence in Media report 2023.  

GlobalData estimates revenues will reach $909bn by 2030, growing at a compound annual growth rate of 35.2% between 2022 and 2030.