Software giant SAP to cut 3,000 jobs, explore selling Qualtrics stake

With the planned job cuts, SAP joins other big tech companies including Microsoft and Amazon in turning to layoffs to cut costs. ST PHOTO: KELVIN CHNG

FRANKFURT – German software giant SAP on Thursday said it planned to cut some 3,000 jobs this year, joining a wave of layoffs in the global tech sector.

The group, which offers both traditional software and cloud-based computing services, said it planned to carry out a “targeted restructuring programme” to strengthen its core business and improve efficiency.

“The programme is expected to affect approximately 2.5 per cent of SAP’s employees,” it said in an earnings report unveiling full-year results for 2022.

SAP has a workforce of around 120,000 employees worldwide, meaning it plans to shed some 3,000 jobs.

The move follows similar cuts announced by technology giants Meta, Amazon, Google, IBM and Microsoft as the once-unassailable sector girds for an economic downturn.

SAP said that its jobs cull would cost the company between €250 million and €300 million (between S$358 million and S$430 million), mainly in the first quarter of 2023.

The restructuring is expected to lead to annual savings of €300 million to €350 million in 2024, “which will help to fuel investments into strategic growth areas”, SAP said.

SAP also said it would explore a sale of its Qualtrics subsidiary, which specialises in online market research software. It added that a sale would further allow SAP to focus more on its core cloud business.

For the whole of 2022, SAP announced revenue of €30.9 billion, up 11 per cent from a year earlier.

Operating profits came in at just over €8 billion, down 2 per cent compared with 2021.

For 2023, SAP expects operating profits to increase by 10 per cent to 13 per cent. AFP

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