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SAP CEO Christian Klein at the annual press conference in Walldorf.
© Uwe Anspach/dpa
SAP wants to benefit more from business with artificial intelligence.
The DAX group is restructuring the company for this purpose.
8,000 employees are affected.
Walldorf - Europe's largest software manufacturer SAP wants to promote business with artificial intelligence (AI) with a major restructuring.
The DAX heavyweight announced late on Tuesday evening that around 8,000 employees would be affected by the project.
The Walldorf-based company had already cut 3,000 jobs around a year ago in order to make itself leaner and to concentrate more on the core business of software for corporate management.
“With the planned transformation program, we are shifting more investments into strategic growth areas, primarily in AI,” said CEO Christian Klein.
“In this way, we will continue to develop groundbreaking innovations in the future and at the same time improve the efficiency of our business processes.” By the end of 2025, SAP will invest almost one billion euros in this area, said Klein.
The hype about AI in the software industry was sparked last year by the release of the chatbot ChatGPT.
Since then, all software companies have wanted a piece of the hoped-for large future cake and are investing a lot of money in the technology.
Renovation costing two billion euros
Last year, SAP had already introduced its own products such as the AI assistant Joule, which is intended to make it easier for users to complete typical tasks in companies.
Now SAP boss Klein is spending another two billion euros in money - that's how much the conversion program is supposed to cost in total.
Part of the restructuring program was also a restructuring of the group structure, it was said.
Volunteer programs and internal retraining are expected to take effect in most of the approximately 8,000 affected positions.
Due to investments in growth areas, SAP expects the number of employees to be approximately at current levels at the end of the year.
It is currently impossible to predict how many of the 8,000 employees affected by the conversion will still work at SAP.
Making decisions like this is never easy, Klein said.
But it's about the best possible future for SAP and about being able to keep up in the tech industry.
According to Klein, around two thirds of the 8,000 affected employees should be persuaded to leave through voluntary measures such as early retirement or severance pay or, for example, be able to qualify for other positions through retraining.
It is important for the works council that the restructuring in Germany is a purely voluntary measure, it was said.
A company spokesman said dismissals for operational reasons are excluded by a works agreement until the end of 2024.
According to the statement, the works council called for the company agreement on employment security to be extended beyond 2024 in order to give employees planning security.
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The job cuts around a year ago did not lead to an overall decline in the number of employees in Walldorf.
As of the end of December, SAP had 107,602 full-time employees, compared to 106,312 a year earlier.
However, many of the employees affected at the time are no longer at SAP.
More speed in cloud sales and earnings
Klein and his CFO Dominik Asam have set themselves a higher pace for cloud sales and earnings this year than last year.
Earnings before interest and taxes adjusted for special effects are expected to grow by 17 to 21 percent if exchange rate effects are excluded.
In the cloud, the subscriptions brought in should provide more boost.
Klein has set the sales teams a currency-adjusted sales increase of 24 to 27 percent as a benchmark.
Cloud products for use over the network have been the growth driver at SAP for a long time.
They are considered more profitable in the long term because customers pay more over a certain period of time than with the previously usual package of licensed software for a high one-off fee and a subsequent maintenance contract.
Initially, however, the cloud contracts mean losses because the high sales prices of the licensed software initially no longer apply.
Make cloud offerings attractive
In the future, AI and other innovations at SAP will be reserved for cloud versions of the software; maintenance for certain products of permanently installed software will expire at short notice.
Klein wants to make cloud offerings attractive to customers.
Overall, SAP increased sales by 6 percent to 31.2 billion euros.
In daily business, the adjusted operating result climbed by nine percent to 8.7 billion euros.
In the final quarter, the lucrative licensing business, which fell significantly less than previously estimated by experts, also helped.
Net profit rose to 5.9 billion euros, more than three times the previous year's profit.
Above all, the billion-dollar special proceeds from the sale of the former US market research subsidiary Qualtrics drove the surplus up.
dpa