** Germnay’s SAP to Cut 3,000 Jobs To Reduce Costs and Transform to Cloud Computing Platform **
The German business software giant SAP plans to cut 3,000 of its employees, around 2.5%, to reduce costs and accelerate its transformation to a cloud computing services company. The initiative was announced by Christian Klein, the company’s CEO, when presenting the 2022 balance sheet.
The job cuts will cost SAP between 250 and 300 million euros, mainly in the first quarter of this year, according to Luka Mucic, SAP’s financial director. The company expects to be able to save between 300 and 350 million a year as of 2024.
As part of its restructuring process, SAP will focus on strategic areas of growth and will divest what is not essential. To that end, yesterday the company announced a strategic partnership with BMW, one of the largest deals it has ever signed, as well as a sale of its stake in Qualtrics, which it bought for 8 billion dollars in 2018 and is valued at 21 billion. The move, according to Mucic, would result in a ‘fairly significant one-time gain’.
SAP is part of the DAX index, the main one on the Frankfurt Stock Exchange, and lowered its net attributable profit by 56% in 2022, to 2,290 million euros, less than half of two years ago. Other tech companies such as Google, Microsoft, Amazon, and IBM have also recently announced layoffs in order to cut costs as they prepare for a tougher economic climate.