SAP to cut down 3,000 jobs globally, plans Qualtrics stake sale
SAP, which offers both traditional software and cloud-based computing services, became the largest tech giant to announce significant layoffs. Recently, Google, Microsoft, Amazon, and IBM also downsized their workforce.
German software company plans to shed up to 3,000 jobs—or about 2.5% of its workforce—as it looks to cut costs and focus on its cloud business.
It is also weighing the sale of its remaining stake in experience management firm . According to reports, SAP has signed Morgan Stanley as its financial advisor on the potential sale.
The company plans to execute a "targeted restructuring programme" to strengthen its core business and improve efficiency.
The development came after SAP reported a 30% increase in revenue in its cloud business in October-December 2022 quarter, helped by strong demand for its software. However, its profits fell 68% in FY22 to $1.87 billion from the previous financial year.
Globally, SAP has around 120,000 employees. The job cuts will cost the company between $358 million and $429 million, mainly in the first quarter of 2023. It expects to increase its operating profits by 10% to 13% in 2023.
The reshuffling is expected to lead to annual savings of $326 million to $380 million in 2024. The company said that it will help fuel investment in strategic growth areas.
Amid extensive job cuts in the technology industry, SAP, which offers both traditional software- and cloud-based computing services, became the largest tech giant to announce significant layoffs during the call. Companies including Amazon, Google, Microsoft, IBM, and other tech players have recently announced layoffs.
Edited by Kanishk Singh