The business software maker which makes business products so esoteric that no one is quite sure what they do is laying off 3,000 employees.
The layoff plans were disclosed this morning during the company’s fourth quarter/full-year 2022 financial results conference call.
CEO Christian Klein said they are part of a targeted restructuring in select areas of the company and makeup 2.5 per cent of the company.
The company provided few details about where the layoffs would occur, although Reuters reported that slightly more than 200 jobs would be cut in Germany where the company is headquartered.
SAP admits that the savings from the cuts would be modest in 2023 – between 300 million and 350 million euros in 2024.
What is also strange is that SAP had very good fourth-quarter financial results, including a six per cent increase in revenue and a 30 percent gain in cloud revenue. All that was wrong with the figures was a decline in profitability.
Klein said the restructuring and layoffs are part of an effort by SAP “to focus more on its core business and profitability.” That includes a move to “simplify and consolidate our portfolio,” he said, specifically citing the company’s flagship S/4HANA application suite and Business Technology Platform (BTP).
SAP also said it is exploring a sale of its 71 percent stake in Qualtrics, the developer of customer experience software that SAP acquired in 2019 for $8 billion and then spun off in an IPO in January 2021 while retaining a majority stake in the company. “SAP believes that this potential transaction could unlock significant value for both companies,” Klein said.
For all of 2022 SAP reported revenue of 30.87 billion euros ($33.56 billion), up 11 percent from 27.84 billion euros ($30.26 billion) in 2021. Profit for the entire year was 1.71 billion euros ($1.86 billion), down 68 percent from 5.38 billion euros ($5.84 billion) one year earlier.
