SAP is launching a restructuring program aimed at incorporating more artificial intelligence (AI) into its operations.
This program will impact 8,000 employees who will either be retrained or leave the company under a voluntary leave program, the provider of enterprise application software said in a Wednesday (Jan. 24) press release.
“In 2024, SAP will further increase its focus on key strategic growth areas, in particular Business AI,” the company said in the release. “It also intends to transform its operational setup to capture organizational synergies, AI-driven efficiencies and to prepare the company for highly scalable future revenue growth.”
The cost of this restructuring is expected to be about 2 billion euros ($2.2 billion), according to the release. The “transformation program” is also expected to deliver 500 million euros (about $545 million) in savings from efficiency gains in 2025.
SAP expects to have about the same number of employees at the end of 2024 as it has now, because it will reinvest in strategic growth areas, the release said.
Twenty-five percent of CEOs think AI will trigger staffing reductions this year, according to a survey conducted by PwC and published Jan. 15.
A quarter of the CEOs said generative AI would lead to job cuts of at least 5% this year, the Financial Times (FT) reported. In addition, 46% of the CEOs said they expect generative AI to increase profitability in the next 12 months, while 47% believe the technology will bring little or no change.
SAP said in September that it would add a generative AI-powered assistant called Joule to its business applications, including human resources (HR), finance, supply chain, procurement and customer experience.
In addition to Joule, the company continues to enhance its Business AI offerings, with over 26,000 SAP cloud customers using AI capabilities across multiple solutions.
SAP’s comprehensive strategy to build an enterprise AI ecosystem includes direct investments and third-party partnerships.
On Jan. 11, IBM said it has partnered with SAP to provide AI solutions for consumer packaged goods (CPG) brands and retail industries focused on supply chain, operations and more. These include tools to improve store delivery routes, product portfolios, order settlement and more.
