SAP to restructure 8,000 roles in push towards AI

(Reuters) -German software firm SAP SE unveiled a 2 billion euro ($2.17 billion) restructuring plan covering 8,000 roles on Tuesday, as it seeks to better focus on growth in artificial intelligence (AI)-driven business areas.

SAP expects generative AI to fundamentally change its business and has pledged to invest more than $1 billion, while opening new tab in AI-powered technology startups via its enterprise capital firm Sapphire Ventures.

The company said it plans the restructuring to help better focus on key growth areas such as business AI. The restructuring programme would be implemented majorly through voluntary leave programs and internal re-skilling measures, the company said, adding that it expects to exit 2024 with a headcount “similar to the current levels.”

SAP has more than 105,000 employees, according to the company’s website.

The restructuring expenses would reflect mostly in the first half of 2024, impacting operating profit, the company said.

The business software maker, separately on Tuesday, also forecast 2024 cloud revenue at 17 billion euros to 17.3 billion euros and updated its 2025 outlook forecasting adjusted cloud gross profit of approximately 16.2 billion euros.

Its key cloud business revenue at 2023 end came in at $13.66 billion euros, falling short of its forecast of 14.06 billion euros. The software firm had previously missed analyst expectations for cloud revenues in the third quarter.

($1 = 0.9211 euros)

(Reporting by Kanjyik Ghosh; Editing by Krishna Chandra Eluri and Rashmi Aich)