SAP Restructuring to Affect Some 2,800 Jobs

By Mauro Orru

SAP SE is embarking on a restructuring program that will affect some 2,800 employees as the German business software company seeks to strengthen its core cloud business at a time when customers are being more cautious with their spending.

The Walldorf, Germany-based company said Thursday that it would book most of 250 million euros to 300 million euros ($272.9 million - $327.4 million) in restructuring costs in the current quarter. The move is expected to generate EUR300 million to EUR350 million in annual cost savings as of 2024.

SAP employed nearly 112,000 people at the end of December and the program should affect around 2.5% of its workforce.

The company ended the last quarter of 2022 with revenue of EUR8.44 billion, up from EUR7.98 billion in the fourth quarter of 2021. Cloud revenue increased to EUR3.39 billion from EUR2.61 billion, while software-licenses revenue fell to EUR907 million from EUR1.46 billion.

Analysts polled by FactSet had forecast overall revenue of EUR8.51 billion, and cloud revenue of EUR3.44 billion.

Operating profit for the quarter rose to EUR2.58 billion from EUR2.47 billion, with SAP's operating margin down to 30.6% from 30.9%. Analysts polled by FactSet had forecast operating profit of EUR2.59 billion.

For the year, SAP expects non-IFRS operating profit at constant currencies between EUR8.8 billion and EUR9.1 billion, and cloud revenue at constant currencies between EUR15.3 billion and EUR15.7 billion.

Write to Mauro Orru at [e-mail]; @MauroOrru94

(END) Dow Jones Newswires

January 26, 2023 01:25 ET (06:25 GMT)

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