By Marco Engemann, dpa-AFX l Friday, January 27, 2023
BERLIN – German software giant SAP AG said on Thursday it wants to cut thousands of jobs in an effort to restructure the company and increase profitability.
The company plans to cut 3,000 jobs, or about 2,5% of employees. The move will reduce annual costs by around €350 million ($382 million), taking effect mostly from 2024, the group said.
SAP also put its US market research subsidiary Qualtrics on the market. A sale could boost profitability and allow more focus on core business, said group CEO Christian Klein.
SAP reported on Thursday that its fourth quarter profit after tax on an International Financial Reporting Standards (IFRS) basis fell 77% to €332 million ($363 million) from last year’s €1.44 billion. IFRS earnings per share decreased 62% to €0.47 from €1.23 a year ago.
Adjusted profit after tax was €1.03 billion or €1 per share, compared to prior year’s €2.27 billion or €1.85 per share. Total revenue increased 6% to €8.44 billion from last year’s €7.98 billion. At constant currency rates, revenues grew 1%.
Looking ahead for fiscal 2023, the company projects accelerating top-line and double-digit non-IFRS operating profit growth.
For the full-year 2023, SAP expects adjusted operating profit of €8.8 billion to €9.1 billion, up 10% to 13% at constant currencies.
The company also sees €15.3 billion to €15.7 billion cloud revenue, up 22% to 25% at constant currencies, and €28.2 billion to €28.7 billion cloud and software revenue, up 6% to 8% at constant currencies.
Further, by 2025, SAP continues to expect more than €11.5 billion adjusted operating profit, more than €22 billion cloud revenue, and more than €36 billion total revenue. SAP expects to update its mid-term ambition in the first half of 2023.