German enterprise software major SAP announced restructuring plans targeting voluntary attrition or role changes for nearly 8000 employees in 2024. This represents over 7% of SAP’s current workforce of over 108,000 as per latest figures.
However, SAP stated that overall headcount by year-end should remain broadly similar after the rejig meant to accelerate growth. Last year, SAP had let go off 3000 workers in a realignment effort.
Sharpened Cloud and AI Focus
SAP aims to strategically reposition itself with a sharper focus on cloud solutions and AI-driven offerings. This as Q4 revenues rose 5% annually led by a 44% jump in cloud which now accounts for over 40% of total sales.
CEO Christian Klein has been steering SAP’s transformation agenda since taking over the reins in 2020 after an over 2-decade stint at the company. Key targets include boosting agility, strengthening customer orientation and driving mass cloud migration from legacy on-premise installations.
Elevated Profit Outlook on Efficiency Gains
While lowering its 2025 adjusted operating profit estimate by 2 billion euros due to higher share-based compensation, SAP raised its profit guidance by 500 million based on efficiencies and cost optimization from the pending revamp.
Themove comes amid a spate of layoffs across the global tech sector driven by funding winter, inflation concerns and anticipated slowdown in enterprise IT spending. But SAP stock jumped nearly 5% as analysts welcomed the profitability focus for long-term competitiveness.
After surging 50% in 2022, SAP share price continues its upward momentum in 2023 as well based on promising cloud transformation progress under Klein’s stewardship.
