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The latest job cuts represent 2.5pc of the global SAP workforce in a move that will see the software company focus on cloud.
European software giant SAP plans to cut around 3,000 jobs this year while it explores selling its stake in US management software company Qualtrics.
In its latest earnings report published today (26 January), SAP said its annual cloud revenue was up 101pc in the latest quarter while for 2022 it was up 33pc.
Headquartered in Germany, SAP develops enterprise software to manage business operations and customer relations. It is particularly known for its enterprise resource planning software.
According to Bloomberg, SAP expects adjusted operating profit for 2023 to rise to up to €9.1bn at constant currencies – beating the average €8.65bn forecast by analysts.
“SAP is more resilient than ever. We end 2022 with continued strong cloud momentum and a return to operating profit growth in the fourth quarter, marking an important inflection point,” SAP chief executive Christian Klein said of the latest earnings.
“Heading into 2023, this gives us great confidence in delivering on our promise of accelerating top line and double-digit non-IFRS operating profit growth.”
The job cuts announced represent around 2.5pc of SAP’s global workforce. The company told Bloomberg that the purpose of the reorganisation and the motivation for the Qualtrics sale is to refocus on its largest business, cloud services. The restructuring will reportedly cost SAP €250m to €300m.
SAP acquired Utah-based Qualtrics in November 2018 in a deal worth $8bn. In 2020, it planned to take Qualtrics public in an IPO while stating its intention to remain the majority owner of the firm. Qualtrics finally went public in 2021.
SAP’s outgoing chief financial officer Luka Mucic praised the “excellent results and continued cloud momentum” reported in the latest earnings.
“We are on track to deliver our growth and profitability commitments for 2023. I am extremely confident in the continued success of SAP’s most exciting transformation in its history.”
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