SAP to Cut up to 10,000 Jobs
German software giant SAP has announced plans to cut up to 10,000 jobs, citing a restructuring of the business and an increased focus on artificial intelligence as reasons for the layoffs. Instead of the originally planned 8,000 job cuts, the company stated that it will now eliminate between 9,000 to 10,000 positions, as employees “have indicated they are prepared to leave,” reported Seebiz.
At the end of the second quarter, the company based in Walldorf had 105,315 employees, about 3,000 fewer than at the end of March. SAP has increased its focus on artificial intelligence in recent years, aiming to streamline its operations and remain competitive in the tech industry.
Artificial Intelligence Drives Revenue Growth
In the first quarter of the year, the company announced a plan to restructure its focus on artificial intelligence. This strategic shift paid off in the second quarter, with revenues increasing by 10 percent to 8.29 billion euros. In the cloud business segment, revenues grew by 25 percent, reaching 4.15 billion euros.
“Our growth in the cloud was strong in the second quarter, with numerous orders enabled by artificial intelligence,” said CEO Christian Klein. “We continue to invest in our transformation to become a leader in the business application of artificial intelligence.”
Decrease in Software License Sales in Second Quarter
Sales of software licenses have decreased by 28% in the second quarter, totaling 200 million euros. The operational profit, measured according to international accounting standards (IFRS), has decreased by 11%, to 1.22 billion euros, due to restructuring costs of 600 million euros. Net profit has dropped by 69%, to 918 million euros.
Job Cuts and Cost Savings Program for 2025
In order to increase operational profit by 200 million euros, a significant company has estimated that a program to reduce the number of jobs and save costs will be implemented by 2025.
