SAP has announced a Transformation Program that is expected to affect 8,000 jobs

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Mostly 8,000 affected positions are expected to be covered by voluntary leave programs and internal re-skilling measures.
mostly 8,000 affected positions are expected to be covered by voluntary leave programs and internal re-skilling measures.

A German multinational software company, SAP, has unveiled its 2024 restructuring plan, set to affect 8,000 jobs, constituting 7.4% of SAP’s total workforce. SAP is planning to roll out a company-wide transformation program, which involves restructuring for 2024. Furthermore, the company is in the process of updating its goals for 2025.

In 2024, SAP plans to enhance its emphasis on vital strategic growth areas, with a particular focus on Business AI. The company is also set to restructure its operations to capitalize on organizational synergies and leverage AI-driven efficiencies, positioning itself for substantial and scalable future revenue growth.

To align SAP’s skill set and resources with future business requirements, the company plans to implement a comprehensive company-wide restructuring program in 2024.

Also, read – AI is too expensive to replace someone’s job

The majority of the approximately 8,000 affected jobs are expected to be covered by voluntary leave programs and internal re-skilling measures. Moreover, it will be reflecting re-investments into strategic growth areas, SAP expects to exit 2024 at a headcount similar to current levels.

Restructuring expenses are preliminarily projected at around €2 billion, the vast majority of which is expected to be recognized in the first half of 2024, impacting IFRS operating profit.

Excluding restructuring expenses, the program is expected to provide only a minor cost benefit in 2024. Expected cost savings and re-investments are fully reflected in SAP’s 2024 outlook and the updated 2025 non-IFRS operating profit- and free cash flow ambition.

SAP’s business outlook, which includes the financial outlook for 2024 as well as the financial ambition for 2025, is based on SAP’s updated non-IFRS definition of profit measures which, beginning in 2024, include share-based compensation expenses and exclude gains and losses from equity securities, net.

Recently, some other companies like Google, Meta, IBM, Salesforce, Amazon, etc announced layoffs as they restructured their teams and operations for the Generative AI era.

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