The manager has given shareholders significant profit increases in 2023.
(Photo: Bloomberg)
Dusseldorf SAP is planning staff cuts: the software manufacturer announced a “targeted restructuring program in selected areas of the company” on Thursday. Around 3,000 employees are affected, 200 of them in Germany, said spokesman Christian Klein on Thursday. This corresponds to 2.5 percent of the workforce of the Dax group.
The goal is to “focus more on strategic growth areas,” explained the manager when the business figures for 2022 were published. While business with business software – in technical jargon ERP – is to be strengthened, for example Cuts in sales and marketing programs planned. This in turn is called CRM in the industry.
Unlike previous restructurings, no early retirement program is planned: Depending on the legal situation, there will be separation agreements or layoffs, announced CFO Luka Mucic. SAP currently has almost 120,000 full-time positions, around 20 percent more than before the outbreak of the pandemic.
Savings at SAP follow Microsoft and Salesforce
According to SAP, the costs of the program amount to 250 to 300 million euros, most of which are to be recorded in the current quarter. The Dax group calculates in the current financial year with a “moderate cost advantage”, from 2024 it expects annual savings of 300 to 350 million euros.
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In the past few weeks and months, numerous technology companies have announced job cuts, including manufacturers of enterprise software. Microsoft is laying off 10,000 employees, almost five percent of the workforce.
Salesforce fires 8,000 employees, around ten percent of the workforce. According to media reports, thousands of jobs are up for grabs at the Cloud Software Group, which includes Citrix and Tibco.
Qualtrics is up for grabs
As part of the portfolio streamlining, SAP is also examining the complete sale of the subsidiary Qualtrics, which specializes in online market research – the company itself speaks of “experience management”. In 2021, the Dax group had already brought part of it to the stock exchange.
SAP has engaged Morgan Stanley as financial advisor. A final decision is pending, however, explained the Dax group – this depends on the market situation, the conditions and official approvals. Qualtrics is currently valued at just under $7 billion.
The restructuring program should be observed with great interest on the stock exchange: for the new year, the management has announced significantly increasing profits in addition to growth in the cloud business. On Wednesday, the share closed at EUR 106.20 – nine percent less than a year ago, but 33 percent more than in September.
More: SAP arouses the anger of many banks