SAP plans job changes or buyouts for 8,000 employees in restructuring plan

Tech

SAP CEO Christian Klein speaks at a panel session on day three of the World Economic Forum (WEF) in Davos, Switzerland, on Thursday, Jan. 19, 2023.

Stefan Wermuth | Bloomberg | Getty Images

SAP said in a statement on Tuesday that it aims to carry out voluntary buyouts or job changes for 8,000 employees as part of a 2024 restructuring program. But the German business software maker said its headcount should remain the same at year end. SAP shares were up about 1% in extended trading.

Higher interest rates have put pressure on the economy, posing greater challenges for technology companies. Alphabet and Amazon announced layoffs this month.

SAP is looking to reposition itself for faster revenue growth, in part from artificial intelligence. Total revenue grew 5% year over year in the fourth quarter.

The company said it now expects 10 billion euros ($10.85 billion) in 2025 adjusted operating profit. That’s down 2 billion euros from its previous outlook because of share-based compensation, but up by 500 million euros thanks to planned efficiencies from the restructuring.

SAP had about 108,000 full-time employees at the end of 2023, meaning that the restructuring will affect over 7% of the workforce. A year ago the company said it would get rid of 3,000 roles.

In 2023, SAP stock gained about 50% in value, its best performance since 2012, while the Nasdaq Composite index grew 43%.

CEO Christian Klein has been working to make SAP more cloud-centric, following similar shifts at Adobe, Microsoft and Oracle. Klein joined SAP in 1999. In 2019 he was named co-CEO with Jennifer Morgan to replace Bill McDermott, and in 2020 Klein became sole CEO. About 44% of SAP’s fourth-quarter revenue, totaling 8.47 billion euros, came from cloud services, up from 25% in 2019.

This is breaking news. Please check back for updates.

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