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With emphasis on AI, SAP to restructure 8,000 jobs; shares reach a record high


emphasis AI SAP restructure 8,000 jobs shares record high

The German software company SAP SE announced that it will reorganize roles for 8,000 jobs in order to concentrate on growth in artificial intelligence (AI)-driven business areas.

This news caused shares of SAP SE to jump 7% to an all-time high.  

The business announced that it will invest 2 billion euros, or $2.2 billion, in the initiative to either retrain staff members with AI skills or replace them through voluntary layoffs.  

SAP began experimenting with OpenAI's ChatGPT as soon as the generative AI technology gained traction and announced plans to integrate it into its products early last year. SAP expects to end 2024 with a headcount similar to current levels.  

With its investment arm, Sapphire Ventures, the German company has committed to investing over $1 billion to support AI-powered technology startups, anticipating that GenAI will transform its business.  

In an effort to focus more on automation and artificial intelligence software to reduce workloads, tech companies, including multinational behemoths like Google and Microsoft, have started laying off employees in large numbers in recent months.  

Due to increased efficiency, 500 million euros more will be made in operating profit in 2025 after the majority of restructuring costs are incurred in the first half of the year.  

After those 2023 figures met or exceeded analyst consensus, the maker of business software separately forecast on Tuesday double-digit percentage growth in revenue from its core cloud business and overall operating profit for the current year.  

After announcing 23% growth, adjusted for currency effects, to 13.66 billion euros in 2023, in line with consensus, SAP stated that cloud revenue is likely to expand 24%–27% in 2024.  

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