An employee works in an office on the SAP SE campus in Walldorf, Germany.
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Shares of German software company SAP jumped to an all-time high in early trades on Wednesday after the company released its latest financial results and announced plans to restructure 8,000 jobs in a push toward artificial intelligence growth.
SAP shares were trading 7% higher by 8:30 a.m. London time.
The company reported a 5% year-over-year revenue increase in the fourth quarter of 2023. The stock jumped about 50% over the year — its best performance since 2012.
in statement Late Tuesday, SAP said it plans to implement voluntary buyouts or support job changes for 8,000 employees as part of a 2024 restructuring plan designed to help it meet “future business needs.”
The restructuring is set to affect more than 7% of SAP's full-time workforce of 108,000, although the company said its headcount should remain the same at the end of the year.
“SAP will increase its focus on key strategic growth areas, particularly business AI. It also intends to transform its operational setup to capture AI-driven organizational synergies and efficiencies and prepare the company for highly scalable future revenue growth.” He said.
CFO Dominic Assam told CNBC that the move is part of the company's goals to “take full advantage of the opportunity” in the next wave of fast-moving technology.
“The next big opportunity is artificial intelligence and we want to be well prepared for that,” Assam told “Street Signs.”
“That means we need to reskill our workforce, and really focus on that,” he said, noting that the company will commit about $2 billion to the plans over the next two years.
“The majority of these people either want to re-skill and move them to new jobs, rather than offering voluntary measures,” Essam said.
He added that the company “cannot rule out that there will also be involuntary departures” as a result of these changes.
Assam said the company's cloud computing business is still growing, but noted that there has been a significant “slowdown” in demand for software services.
“The cloud is really firing on all cylinders. We're accelerating there,” he said. “We have delivered on our promise to transform SAP into a cloud-based, scalable company.”
