SAP said on Tuesday that it aims to carry out voluntary buyouts or enable job changes for 8,000 employees as part of a restructuring program for 2024.
The German software company said in a statement that its headcount should remain the same at year end. SAP had about 108,000 full-time employees at the end of 2023, meaning that the restructuring will affect over 7% of the workforce.
SAP shares were up about 5% in extended trading. The stock jumped about 50% last year, its best performance since 2012, while the Nasdaq Composite index rose 43%.
SAP is aiming to reposition itself for faster growth, in part from artificial intelligence after revenue increased 5% year over year in the fourth quarter. Higher interest rates and concerns about the economy have hurt tech spending and led to layoffs across the industry, starting in late 2022. A year ago SAP said it would get rid of 3,000 roles.
The downsizing trend has continued to start 2024, with companies including Alphabet and Amazon announcing layoffs this month.
SAP said it now expects 10 billion euros ($10.85 billion) in 2025 adjusted operating profit. That’s down 2 billion euros from its previous outlook because of share-based compensation, but up by 500 million euros due to planned efficiencies from the restructuring.
CEO Christian Klein has been working to make SAP more cloud-centric, following similar shifts at Adobe, Microsoft and Oracle. Klein joined SAP in 1999. In 2019 he was named co-CEO with Jennifer Morgan to replace Bill McDermott, and in 2020 Klein became sole CEO. About 44% of SAP’s fourth-quarter revenue, totaling 8.47 billion euros, came from cloud services, up from 25% in 2019. That was above the consensus of 8.33 billion euros among analysts polled by LSEG.
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