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SAP SE stock prices rise after the German software company announced it would restructure the roles of 8,000 jobs to forecast growth in cloud revenue and focus on growth in artificial intelligence (AI)-driven business areas. , soared 7% to a record high.
The company said it would spend 2 billion euros ($2.2 billion) on programs to retrain employees with AI skills or replace them through voluntary redundancy programs.
SAP, which expects to end 2024 with about the same headcount as it does today, began experimenting with OpenAI's ChatGPT as soon as generative AI technology started gaining traction, and announced plans to incorporate it into its products early last year. .
File photo: Logo of German software group SAP. Photographed on May 12, 2016 at our headquarters in Walldorf, Germany. Reuters/Ralph Orlowski (Reuters/Reuters Photo)
German companies now expect GenAI to fundamentally change their businesses and will invest more than $1 billion in backing AI-powered technology startups through their investment arm Sapphire Ventures. is promised.
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“The right adjustments are being made and we are restructuring the company for the era of artificial intelligence,” said Jürgen Molnar, investment strategist at brokerage Robomarket.
“Even if some employees may fall through the cracks, HR policies are more strategic than cost issues, and many new opportunities may emerge from them,” he said. is high,” he said.
Tech companies, including global giants like Google and Microsoft, have embarked on a wave of layoffs in recent months, shifting their focus to artificial intelligence software and automation to lighten workloads.
| ticker | safety | last | change | change % |
|---|---|---|---|---|
| SAP | SAP SE | 174.61 | +11.23 | +6.87% |
Most of the restructuring costs will be incurred in the first half of this year, with efficiency improvements expected to contribute €500 million to operating profit in 2025.
strong outlook
The business software maker said separately on Tuesday that revenue from its core cloud business and operating profit for the current fiscal year as a whole were in double digits after 2023 numbers met or exceeded analyst consensus. It was predicted that the growth rate would be .
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SAP expects cloud revenue to rise 24% to 27% in 2024, after reporting 23% growth in 2023 adjusted for currency effects, in line with consensus to €13.66 billion. He said there was.
Operating profit rose 13% after adjusting for currency to 8.7 billion euros last year, beating the 9% increase expected by analysts commissioned by the company. For 2024, this figure he expects SAP to increase by 17% to 21%.
Poland – 25/10/2023: This photo illustration shows the SAP logo on a smartphone with artificial intelligence graphics in the background. (Photo illustration: Omar Marques/SOPA Images/LightRocket, Getty Images) (Omar Marques/SOPA Images/LightRocket, Getty Images/Getty Images)
“We delivered on our commitments and delivered double-digit growth in non-IFRS operating profit despite an unfavorable macro environment,” said Dominic Assam, SAP's chief financial officer. He expressed his intention to further enhance his sexuality.
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The company on Tuesday separately adjusted its medium-term outlook to account for changes in accounting practices, lowering its operating profit target for 2025 to 10 billion euros from about 11.5 billion euros previously.
