Christian Klein, CEO of the software company SAP, stands on the podium looking at his cell phone before the start of the company’s Annual General Meeting.
Uwe Anspach | Picture Alliance | Getty Images
SAP said on Tuesday that it aims to carry out voluntary buyouts or enable job changes for 8,000 employees as part of a restructuring program for 2024.
The German software company said in a statement that its headcount should remain the same at year end. SAP had about 108,000 full-time employees at the end of 2023, meaning that the restructuring will affect over 7% of the workforce.
SAP shares were up about 5% in extended trading. The stock jumped about 50% last year, its best performance since 2012, while the Nasdaq Composite index rose 43%.
SAP is aiming to reposition itself for faster growth, in part from artificial intelligence after revenue increased 5% year over year in the fourth quarter. Higher interest rates and concerns about the economy have hurt tech spending and led to layoffs across the industry, starting in late 2022. A year ago SAP said it would get rid of 3,000 roles.
SAP said it now expects 10 billion euros ($10.85 billion) in 2025 adjusted operating profit. That’s down 2 billion euros from its previous outlook because of share-based compensation, but up by 500 million euros due to planned efficiencies from the restructuring.
CEO Christian Klein has been working to make SAP more cloud-centric, following similar shifts at Adobe, Microsoft and Oracle. Klein joined SAP in 1999. In 2019 he was named co-CEO with Jennifer Morgan to replace Bill McDermott, and in 2020 Klein became sole CEO. About 44% of SAP’s fourth-quarter revenue, totaling 8.47 billion euros, came from cloud services, up from 25% in 2019. That was above the consensus of 8.33 billion euros among analysts polled by LSEG.