SAP Restructures Amid Rise of AI, Impacting 8,000 Jobs

• SAP unveils an AI transformation program.
• It will retrain or offer packages to 8,000 employees.
• The $2.2B initiative aims to boost profits and focus SAP on business AI.

SAP’s AI prioritization program

SAP, the German enterprise software giant, has unveiled a transformation program aimed at prioritizing artificial intelligence capabilities in its products.

As part of the $2.2 billion initiative, around 8,000 employees – approximately 7% of SAP’s workforce – will be offered retraining or voluntary redundancy packages throughout 2023.

While the restructuring will not involve involuntary layoffs, it represents a concerted shift for SAP as AI takes on growing strategic importance.

Redeploying resources

The company aims to redeploy resources and skills to focus on “Business AI” offerings while projecting a $1.5 billion boost in operating profits by 2025 from the changes.

The announcement came as SAP reported stronger-than-expected earnings results, with growth being driven by its cloud segment.

Growth and strategic investments

Its push into AI also builds on steady investments in AI startups, with SAP having allocated around $1 billion to acquire AI enterprise technology companies over recent years.

“SAP is opening the next chapter: with the planned transformation program, we are intensifying the shift of investments to strategic growth areas, above all Business AI,” commented CEO Christian Klein on the company’s outlook.

SAP expects the headcount to remain at current levels.