SAP said Wednesday that it will undergo a major restructuring in 2024, with a heightened focus Artificial Intelligence (AI) for businesses. This restructuring, while initially costly, is poised to drive SAP’s long-term growth and competitiveness in the evolving global market, SAP said.
This initiative will primarily involve voluntary programs and internal retraining for most of the approximately 8,000 affected positions. Despite these changes, SAP expects its employee count by the end of 2024 to remain at the current level, thanks to reinvestments in strategic growth areas.
The restructuring costs are preliminarily estimated at around €2 billion, most of which are expected to be accounted for in the first half of 2024. This will impact the operating results (IFRS). Excluding the restructuring costs, only a marginal cost benefit is anticipated from the program in 2024. The expected cost savings and reinvestments are fully reflected in SAP’s outlook for 2024 and in its updated 2025 targets for operating results (Non-IFRS) and free cash flow.
SAP’s strategic shift towards AI and its substantial investment highlight the increasing importance of digital transformation in the enterprise sector.