SAP reducing headcount by up to 3,000
The layoffs would amount to approximately 2.5% of SAP's workforce
Big Tech layoffs suggest something bigger is coming: Kevin Hassett.
Former Council of Economic Advisers Chairman Kevin Hassett reacts to some Big Tech giants slashing jobs, telling 'Cavuto: Coast to Coast' that data indicates the economy is heading toward a recession.
SAP will slash its headcount by roughly 2.5%, the Germany-based software company announced as it posted its fourth-quarter earnings Thursday.
As of the end of 2022, the company reported having nearly 112,000 full-time equivalent employees. The layoffs, which will impact up to 3,000 workers, stem from a "targeted restructuring program in selected areas of the company," according to SAP’s earnings release.
TECH LAYOFFS CONTINUE AS IBM, SAP ANNOUNCE MASSIVE CUTS
With its restructuring plan, SAP aims to "further focus on strategic growth areas by aligning our operating models and go-to-market approach with our accelerated cloud transformation," the company said in the release. It also "intends to strengthen its core business and improve overall process efficiency."
FILE PHOTO: The logo of German software group SAP is pictured at its headquarters in Walldorf, Germany. REUTERS/Ralph Orlowski (Reuters / Reuters Photos)
Overall, the restructuring plan will come with €250-300 million in charges. It is "expected to provide a moderate cost benefit in 2023 and €300 million to €350 million in annual cost savings as of 2024," according to SAP.
ARE TECH LAYOFFS THE CANARY IN THE US JOBS MARKET?
SAP also revealed that it is exploring the possibility of selling its stake in a company it acquired in 2019 and later spun off, Qualtrics. Qualtrics had its initial public offering in early 2021 and, according to Qualtrics’ most recent proxy statement, SAP owned over 70% of its shares as of February 2022.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| SAP | SAP SE | 236.25 | +0.22 | +0.09% |
| XM | NO DATA AVAILABLE | - | - | - |
Morgan Stanley is serving as SAP’s financial advisor in its consideration of the sale, according to SAP.
On Thursday, SAP posted a 6% increase in fourth-quarter revenue from that same period in 2021, coming in at €8.44 billion for Q4 2022.
FTC WARNS OF JOB SCAMS AMID RECENT LAYOFFS IN TECH AND OTHER INDUSTRIES
SAP’s announcement of a headcount reduction comes the same day materials science company Dow Inc. said it was cutting 2,000 jobs. The day prior, tech giant IBM announced a 1.5% reduction in its workforce.
The tech industry, in particular, has seen a recent wave of layoffs, including ones by Spotify, Microsoft, Alphabet, Amazon and Salesforce.
A group of people work in a modern boardroom with the latest technology. (iStock / iStock)
Since the start of 2023, over 67,000 people across the globe in the tech industry have gotten laid off, according to Layoffs.fyi.