German software giant SAP to lay off 3,000 employees to 'strengthen core business'

German software giant SAP on Thursday said it planned to cut some 3,000 jobs this year, joining a wave of layoffs in the global tech sector. The Walldorf-based company, which provides traditional software as well as cloud computing services, announced plans to implement a "targeted reorganisation programme" in order to "strengthen its core business" and boost productivity.

In an earnings report announcing full-year results for 2022, SAP stated that "the programme is estimated to effect around 2.5 percent of SAP's workforce." Around 120,000 people work for SAP worldwide, thus it aims to eliminate 3,000 positions.

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The action comes after comparable layoffs by tech behemoths Meta, Amazon, Google, IBM, and Microsoft as the formerly impregnable industry braces for a slump.

According to SAP, the cost of the layoffs would be between 250 and 300 million euros, mostly in the first quarter of 2023. Beginning in 2024, the restructure should result in yearly savings of 300-350 million euros, "which will assist to drive investments into important growth areas," according to SAP.

Additionally, SAP declared that it will look at selling its subsidiary Qualtrics, which specialises in software for online market research.

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SAP claimed that a sale would further enable it to concentrate on its core cloud business. The company reported revenues of 30.9 billion euros for the entire year of 2022, an increase of 11% over the prior year.

Just over 8 billion euros were made in operating earnings, a 2% decrease from 2021. The SAP anticipates operating earnings to rise by 10 to 13% in 2023.

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