SAP restructures to propel AI business unit

Staff Writer
By Staff Writer, ITWeb
Johannesburg, 24 Jan 2024
Christian Klein, CEO of SAP.
Christian Klein, CEO of SAP.

German enterprise software company SAP has announced a €2 billion (R41 billion) restructuring plan that will impact 8 000 roles.

This, as the company says it aims to sharpen its focus on growing its artificial intelligence (AI) business unit.

The job changes will be covered by voluntary leave programmes and internal re-skilling measures, and it expects to exit 2024 at a headcount similar to current levels, notes SAP.

It will this year further increase its focus on key strategic growth areas, in particular business AI, and intends to transform its operational set-up with AI-driven efficiencies.

The company recently launched a series of generative AI capabilities and a centralised resource hub to help software developers leverage AI for business applications.

SAP’s financial results for the fourth quarter and fiscal year ended 31 December, released yesterday, show cloud revenue was up 20% for FY 2023, underpinned by 25% cloud revenue growth at constant currencies in the fourth quarter.

“We met or exceeded our outlook for 2023 in all key metrics. Based on a stellar order entry, our current cloud backlog expanded by 27% – an all-time high,” says Christian Klein, CEO of SAP.

“We are confident about the company’s prospects in 2024. From this position of strength, SAP is opening the next chapter: with the planned transformation programme, we are intensifying the shift of investments to strategic growth areas, above all business AI.

“Going forward, this will empower us to keep leading with innovation, while increasing the scalability of the operating model.”

Says Dominik Asam, CFO of SAP: “2023 was a year of inflection. We kept our promise and achieved double-digit operating profit growth despite an adverse macro environment.

“In 2024, we will focus on putting the right gradient of earnings growth in place to deliver on our raised ambition for 2025, and sustain growth and financial performance beyond.”