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29 March 2024

Billion-euro SAP restructuring to cost 4,400 jobs

Photo: AFP

Published
By AFP

German software giant SAP said Tuesday it would slash 4,400 jobs in a billion-euro restructuring plan after profits stagnated in 2018, while insisting it was on track to grow revenues and earnings this year.

"We are talking about a completely voluntary programme," chief financial officer Luka Mucic said.

The number of job cuts would be "slightly higher" than during a previous overhaul in 2015, he added, when the group shifted focus to "cloud" computing from traditional software.

"We are expecting 4,400 job cuts, more than the 3,000 in 2015 and we think that Germany and the US will be the most impacted," spokesman Benjamin Nickel told AFP.

Under the new turnaround plan, executives plan to spend between 800 million and 950 million euros ($915-$1.1 billion) on restructuring in 2019 "to further simplify company structures and processes".

They aim to realise "a minor cost benefit" this year, before slashing annual outgoings by up to 850 million euros from 2020.

Chief executive Bill McDermott said the departures were necessary to clear the way for SAP to make new bets on growth areas in the software industry.

"We are going to move our people and our focus to the areas SAP needs the most, AI (artificial intelligence), blockchain, internet of things, quantum computing," he said.

"We currently have 95,000 people in the company, if we talk in a few years it will be more," McDermott added.

Software giant SAP says to slash 3,000 jobs

German software giant SAP said Tuesday it would slash around 3,000 jobs as it launches a mammoth cost-cutting programme against a background of stagnant profits.

"We are talking about a completely voluntary programme, we expect a number slightly higher than in 2015 of employees" to leave, chief financial officer Luka Mucic said, referring to a past move to cut 2,200 positions as SAP shifted focus to "cloud" computing from traditional software.