Enterprise application software major SAP slashes 3,000 jobs

London, Jan 26

Enterprise application software provider SAP on Thursday revealed it will lay off around 2.5 per cent of its global workforce, or 3,000 employees, amid the rough global macroeconomic conditions.

The Germany-headquartered company said that it expects only a moderate cost saving impact for this year. The company will slash more than 200 jobs in Germany.

The layoff announcement came as the company said its cloud revenue was up 30 per cent to 3.39 billion euros in the fourth quarter (Q4) of 2022.

SAP S/4HANA cloud revenue further accelerated and was up 101 per cent to 0.66 billion euros.

However, its software licenses revenue was down 38 per cent to 0.91 billion euros.

SAP has also decided to explore a sale of its stake in Qualtrics.

"SAP believes that this potential transaction could unlock significant value for both companies and their shareholders: for SAP, to focus more on its core cloud growth and profitability; for Qualtrics, to extend its leadership in the XM category that it pioneered," said the company.

The company said that as of December 31, total cloud backlog -- which is defined as the contractually committed cloud revenue it expects to recognise in future periods -- was up 35 per cent to 34.2 billion euros.

In 2022, SAP's business was impacted by the war in Ukraine and SAP's decision to wind down its business operations in Russia and Belarus.

"SAP is more resilient than ever. We end 2022 with continued strong cloud momentum and a return to operating profit growth in the fourth quarter, marking an important inflection point," said Christian Klein, CEO.

Heading into 2023, "this gives us great confidence in delivering on our promise of accelerating topline and double-digit non-IFRS (international financial reporting standards) operating profit growth," he added.

Luka Mucic, CFO, said that the SAP team is announcing excellent results and continued cloud momentum.

"We are on track to deliver our growth and profitability commitments for 2023. I am extremely confident in the continued success of SAP's most exciting transformation in its history," he said.

--IANS