Germany’s enterprise application software-maker SAP will cut 3,000 jobs, or 2.5 per cent of its total workforce globally. SAP will also explore the options to sell off its 71 per cent stake in Qualtrics, another software company of Germany that focuses on cloud computing business. The company will cut a little for than 200 jobs in Germany, where it is currently headquartered.
SAP now joins the likes of Alphabet-owned Google, Microsoft, Amazon and Meta who announced thousands of layoffs in recent times in what some of them said was part of their efforts to brace for more difficult economic conditions.
“We expect only a moderate cost saving impact for 2023, and a more pronounced one in 2024, about 300 million euros to 350 million in run rate savings as of 2024,” Chief Financial Officer Luka Mucic said in a call with journalists, Reuters reported.
Strong rise in revenues, still layoffs
The layoffs come after SAP reported a 30 per cent revenue increase in its cloud business in the fourth quarter, stoked by strong demand for its software.
SAP has also started the process to sell its stake in Qualtrics, which it had bought for $8 billion in 2018 and took it public in 2021 at a valuation of nearly $21 billion. Qualtrics current valuation stands at $7 billion.
“(The sale) would result in a quite significant one-time gain,” Mucic said. “This would materially increase the profit performance of SAP, but it’s currently not reflected in the outlook,” Luca Mucic said.
SAP forecast core operating profit of 8.8-8.9 billion euros at constant currencies for this year. It also expects cloud revenue at constant currencies for 2023 to rise to 15.3-15.7 billion euros, from 12.56 billion euros last year.
SAP has also been signing more customers.
“We are going to announce a unique strategic partnership with BMW betting on SAP on all dimensions – one of the biggest deals ever, which was signed yesterday,” Chief Executive Christian Klein said.
(With inputs from agencies)
You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here.
For all the latest business News Click Here
