German software giant SAP to lay off around 2.800 employees after disappointing results

SAP seeks to strengthen its business with a restructuring program

SAP, a German software company, announced that it will start a restructuring program after being disappointed with the balance sheet for the last quarter of last year. The program relies on the dismissal of a huge number of employees, totaling approximately 2.800 workers. So right now, the company is looking to strengthen its cloud business.

The software giant expects the program to generate annual savings of up to €350 million from 2024 onwards.

SAP, which is based in Walldorf, announced on Thursday (26) that it will account for most of the 250 million euros to 300 million euros in restructuring costs in the current quarter. The software company expects the program to generate annual savings of €300 million to €350 million from 2024 onwards.

It is possible that SAP's initiative was influenced by large technology companies in the United States, such as Microsoft, Meta Platforms (Facebook) and Alphabet (Google), which announced plans to cut thousands of employees. At the end of last year, the company employed around 112 people, which means that the dismissal caused by its restructuring will affect around 2,5% of its staff.

SAP's slowed growth led to the planning of the big layoff

SAP's restructuring program comes after the German company's revenue grew less than expected in the fourth quarter of 2022. According to information from Dow Jones Newswires, the company moved 8,44 billion euros, up from 7,98 billion euros in the same period of the previous year. In this comparison, only the cloud unit's revenue increased from 2,61 billion euros to 3,39 billion euros. Analysts polled by FactSet had forecast total revenue of 8,51 billion euros and cloud revenue of 3,44 billion euros.

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