One of Europe’s biggest tech companies is restructuring 8,000 jobs in an effort to shift their focus to AI.
ADVERTISEMENTSAP shares jumped more than 9% on Wednesday and hit record levels after the software giant announced restructuring plans affecting thousands of jobs, as the company prepares for generative AI to fundamentally change its business.
The company, known for its software products used to manage business operations and customer relations, has pledged to spend €2 billion on re-investments, such as backing AI-powered technology startups and training to boost artificial intelligence (AI)-driven business areas.
The transformation affects approximately 8,000 of its current employees, out of more than 107,000.
The company said in their statement that "the majority of the positions are expected to be covered by voluntary leave programs and internal re-skilling measures," adding that by the end of the year, the number of staff is expected to be "similar to the current levels".
“With the planned transformation program, we are intensifying the shift of investments to strategic growth areas, above all Business AI,” said Christian Klein, CEO. “Going forward, this will empower us to keep leading with innovation while increasing the scalability of the operating model.”
Global tech companies including Google and Microsoft have announced layoffs recently as they are embracing artificial intelligence software and making their workload increasingly more automated.
SAP expects that the transformation will increase efficiency so much that the operating profit will be raised by half a billion euros in 2025.
SAP had a strong performance in 2023
The software firm has also released its latest financial results for the last three months and the full year of 2023.
The annual earnings beat expectations and boosted share prices further after the company’s stocks soared by more than 50% throughout the last 12 months.
For the full year of 2023, the software firm’s operating profit increased by 9% and its revenue soared by 5% compared to the previous year.
The annual revenue of its key cloud business saw a 20% jump, as SAP expects accelerated growth in this segment in 2024.
