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Shares of German software company SAP jumped to an all-time high in early deals Wednesday after the company released its latest financial results and announced plans to restructure 8,000 jobs in a push toward artificial intelligence growth.
SAP shares were trading up 7% by 8:30 a.m. London time.
The company posted revenues increased 5% year-over-year in the fourth quarter of 2023. The stock jumped about 50% over the course of the year — its best performance since 2012.
In a statement late Tuesday, SAP said that it plans to carry out voluntary buyouts or support job changes for 8,000 staff as part of a 2024 restructuring plan designed to help it meet “future business needs.”
The restructuring is set to affect over 7% of SAP’s 108,000 full-time workforce, though the company said its headcount should remain the same at year end.
“SAP will further increase its focus on key strategic growth areas, in particular Business AI. 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 company said.
‘Next big opportunity’
Chief Financial Officer Dominik Asam told CNBC that the move is part of the company’s aims to “fully capitalize on the opportunity” on the next wave of fast-moving technology.
“The next big opportunity is artificial intelligence and we want to be well prepared for that,” Asam told “Street Signs.”
“That means we need to reskill our workforce, really focus on that,” he said, noting that the company would commit around $2 billion to the plans over the coming two years.
“The majority of these people we either want to reskill and transfer to new positions, over offer voluntary measures,” Asam said.
He added that the company “cannot exclude that there will also be non-voluntary departures” as a result of the changes.
Asam said the company’s cloud computing business is still growing, but noted that there had been a significant “deceleration” in demand for software services.
“Cloud is really firing on all cylinders. We are accelerating there,” he said. “We delivered on a promise to transform SAP into a cloud and growth company.”