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SAP is making significant employment layoffs as it plans for strategic growth

SAP Labs India has announced the establishment of a new office in Pune to Hire 300 employees

On January 23rd, 2024, SAP announced that it will undergo a comprehensive restructuring in 2024, which will impact over 8,000 jobs or more than 7% of the workforce. The German software giant aims to prioritize its strategic growth areas, such as “business AI,” and identify “AI-driven efficiencies” within its operations. By the end of 2023, the company plans to maintain its current headcount of approximately 107,602 full-time employees.

SAP aims to integrate AI tools into virtually all of its product offerings and requires resources to meet future business requirements. The company stated that most affected positions would be addressed through voluntary leave programmes and internal re-skilling measures.

The announcement garnered a positive response from investors, with SAP’s stock experiencing a notable uptick of around 5% during extended trading. Additionally, the company reported a 5% year-over-year revenue increase in the fourth quarter.

Christian Klein, who became CEO of SAP in 2020, is leading the company towards a more cloud-centric model in line with similar industry shifts. Approximately 44% of SAP’s fourth-quarter revenue, totaling 8.47 billion euros, was derived from cloud services, surpassing the 2019 figure of 25%.

Recently, SAP made changes to its return-to-office requirements. The company now wants its employees to work from the office for three days a week, up from two days a week. This mandate will be in effect until the end of April 2024 and is part of an evolution in the company’s flexible-work policy, aligning with industry best practices.