Software Giant SAP to let go 3,000 employees, says it will focus on core businesstext_fields
Berlin: German software giant SAP has joined the global wave of layoffs in the tech sector. The company said it is planning to lay off around 3,000 workers in 2023 to carry out a "targeted restructuring programme" to "strengthen its core business" and improve efficiency.
The move was revealed in an earnings report. It read that the programme is expected to affect approximately 2.5% of SAP's employees. In Germany itself, there will be 200 jobs cut. In 2022, SAP had a revenue of 30.9 billion euros which is 11% up from 2021.
The tech giant has around 12,000 employees across the world. The layoffs are to cost the company between 250 and 300 million euros. The effect will be mostly seen in the first quarter of 2023. However, the restructuring is expected to save annual savings of 300-350 million euros from 2024. Chief Financial Officer Luka Mucic told the media that the company expects only a moderate cost-saving impact for 2023 and a more pronounced one in 2024. SAP said this will fuel investments into strategic growth areas.
The company is also exploring the sale of its Qualtrics subsidiary, which specialises in online market research software and focuses on its core cloud business. Survey-software seller Qualtrics currently has a market value of $7 billion and SAP has a 71% stake. "The sale would result in a quite significant one-time gain. This would materially increase the profit performance of SAP, but it's currently not reflected in the outlook," added Mucic.
This year, SAP is expecting operating profits to increase by 10-13%. Chief Executive Christian Klein also said the company is going to announce a unique strategic partnership with BMW. It is one of the biggest deals ever and it was signed yesterday.