German software company SAP has announced a €2bn ($2.2bn) restructuring programme for 2024, which is expected to impact around 8,000 roles.
This initiative is part of SAP’s broader transformation strategy aimed at enhancing growth in artificial intelligence (AI)-driven business areas, particularly ‘Business AI’.
The company is also updating its ambitions for 2025, with plans to increase its focus on strategic growth areas this year and transform its operational setup to leverage “organisational synergies” and AI-driven efficiencies.
The company noted that this transformation is designed to prepare the organisation for scalable future revenue growth.
Majority of the affected positions are anticipated to be managed through voluntary leave programmes and internal re-skilling measures.
Despite the restructuring, SAP said it expects to maintain a workforce size similar to current levels by the end of 2024.
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The estimated initial restructuring expenses of approximately €2bn will predominantly be recognised in the first half of the current year.
However, excluding these expenses, the programme is expected to yield only a minor cost benefit in 2024.
According to a Reuters’ report, SAP has also committed to investing over $1bn in generative AI, which it believes will fundamentally transform its business.
The report said that this investment will see SAP supporting AI-powered technology startups through its enterprise capital company Sapphire Ventures.
Reuters quoted SAP chief executive Christian Klein as saying that the latest company-wide transformation effort will allow SAP to continue innovations, while also improving the overall efficiency of its business processes.
SAP, which currently has more than 105,000 employees, specialises in providing a comprehensive suite of applications and services to help companies of all sizes and different industries to operate profitably.
On 23 January, SAP also provided its 2024 cloud revenue forecast, projecting figures between €17bn and €17.3bn, and updated its 2025 outlook with an expected adjusted cloud gross profit of approximately €16.2bn.
The company’s cloud business revenue at the end of 2023 was €13.66bn, which is less than the projected €14.06bn.