SAP (NYSE:SAP) layoffs are coming for a massive number of employees as the German software company plans to switch focus to artificial intelligence (AI).
This will see some 8,000 workers affected by the headcount reduction as the company undergoes a restructuring. It predicts that this will result in operating profit increasing to $10.9 billion in 2025.
While SAP is conducting layoffs, the company intends to close out 2024 with a similar number of employees to its current headcount. That’s due to it planning to hire in new employees as it shifts focus to the development of AI tools.
SAP CEO Christian Klein said the following about the changes in an interview:
“The next phase is all about an ongoing transformation […] We are investing in AI, over a billion for the next two years, while of course we’re also applying AI internally. So we will try for higher automation, automation of activities. It’s all about re-skilling and making sure that SAP on its own becomes more productive.”
SAP Joins Layoffs Trend
The number of companies announcing layoffs has been increasing recently as they prepare for 2024. Many firms have concerns about a tough economy that could hold back business. That comes as inflation and interest rates both remain high in the United States.
SAP stock is up 6.9% as of Wednesday morning.
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On the date of publication, William White did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
