The German software manufacturer SAP announced on Thursday that it will lay off 3,000 workers as part of a restructuring aimed at improving profitability, following a sharp decline in profits in the fourth quarter.
The layoff of 3,000 workers, or about 2.5 percent of employees, is expected to reduce SAP’s annual costs by approximately 350 million euros, starting mainly from 2024, the group stated.
SAP has also decided to sell its American market research subsidiary Qualtrics, which, according to Group CEO Christian Klein, could enhance the group’s profitability and allow for a stronger focus on core business.
The group also reported a 77 percent drop in profits in the fourth quarter compared to the same period a year earlier, according to data based on International Financial Reporting Standards (IFRS).
Net profit after tax was thus reduced to 332 million euros. Earnings per share, according to IFRS, also sharply decreased by 62 percent to 47 euro cents.
Adjusted net profit after tax amounted to 1.03 billion euros, down 54 percent from the same period a year earlier. Earnings per share fell to one euro.
At the same time, total revenue increased by six percent to 8.44 billion euros. Excluding currency fluctuations, it increased by only one percent.
In fiscal 2023, the company forecasts faster growth in total revenue and double-digit growth in operating profit, according to data not based on IFRS.
Adjusted operating profit is expected to range from 8.8 to 9.1 billion euros, an increase of 10 to 13 percent when excluding currency fluctuations.
Cloud business revenue is expected to grow by 22 to 25 percent, to 15.3 to 15.7 billion euros. When software revenue is added, it should amount to between 28.2 and 28.7 billion euros, an increase of six to eight percent.
SAP also confirmed its forecasts for 2025, expecting over 11.5 billion euros in adjusted operating profit, cloud revenue exceeding 22 billion, and total revenue exceeding 36 billion euros.
