SAP is set to undergo a comprehensive restructuring in 2024. The move will impact about 8,000 jobs, or over seven per cent workforce. The German software giant emphasised its commitment to maintaining the current headcount by year-end with approximately 1,07,602 full-time employees at the close of 2023.
The move comes as the company wishes to prioritise its strategic growth areas, such as ‘business AI,’ and aims to identify ‘AI-driven efficiencies’ within its operations.
On Tuesday, 23 January, 2024, SAP announced its intention to enhance the integration of AI tools into virtually all product offerings, emphasising the need for resources to meet future business requirements. The company stated that most affected positions would be addressed through voluntary leave programmes and internal re-skilling measures.
In response to this announcement, SAP’s stock experienced a notable uptick of around five per cent during extended trading. Additionally, the company reported a five per cent year-over-year revenue increase in the fourth quarter.
Christian Klein, CEO, SAP, who took the helm in 2020, has been steering SAP towards a more cloud-centric model, aligning with similar industry shifts. Klein’s leadership has contributed to a significant shift, with approximately 44 per cent of SAP’s fourth-quarter revenue, totalling 8.47 billion euros, derived from cloud services—surpassing the 2019 figure of 25 per cent.
Recently, SAP made changes to its return-to-office requirements. Earlier, the company wanted its employees to work from office for two days a week. Now, it wants them to work from office for three days a week. This mandate will be in effect until the end of April 2024, allowing for a transition period.
The decision is said to be a part of an evolution in the company’s flexible-work policy, aligning with industry best practices.
