AI to affect 8,000 jobs at SAP - Here’s how much it’s going to cost

The German software company SAP SE revealed a restructuring plan amounting to 2 billion euros ($2.17 billion), targeting 8,000 positions. This initiative aims to streamline operations and enhance focus on growth within artificial intelligence (AI)-driven business sectors. 

SAP anticipates a transformative impact from generative AI on its business and has committed to investing over $1 billion. Additionally, the company is actively engaging with AI-powered technology startups through its enterprise capital firm, Sapphire Ventures. 

The company has outlined plans for restructuring to enhance its concentration on key growth areas, particularly business AI. The restructuring program will predominantly involve voluntary leave programs and internal re-skilling initiatives, with the expectation of concluding 2024 with a headcount comparable to current levels, reported Reuters. 

As of the latest available information from the company's website, SAP boasts a workforce of over 105,000 employees. The restructuring expenses are anticipated to be predominantly reflected in the first half of 2024, impacting the company's operating profit. 

Additionally, on Tuesday, the business software maker provided a forecast for 2024 cloud revenue ranging between 17 billion euros to 17.3 billion euros, revealed a report by Reuters. Furthermore, it updated its 2025 outlook, projecting an adjusted cloud gross profit of approximately 16.2 billion euros. 

As of the end of 2023, the key cloud business revenue stood at $13.66 billion euros, falling short of the forecasted 14.06 billion euros. The software firm had previously missed analyst expectations for cloud revenues in the third quarter.