A German multinational software company, SAP has announced its restructuring plan for 2024 that will impact 8000 jobs, 7.4% of SAP’s total workforce.
SAP will implement a company-wide transformation program including restructuring for 2024. In addition, the company is updating its ambition for 2025.
In 2024, SAP will further increase its focus on key strategic growth areas, in particular Business AI. It also intends to transform its operational setup to capture organizational synergies, and AI-driven efficiencies and to prepare the company for highly scalable future revenue growth.
To ensure that SAP’s skill set and resources continue to meet future business needs, the company plans to execute a company-wide restructuring program in 2024.
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 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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