German software company SAP shares soared on Wednesday, 8:15 a.m., London Time, Jan. 24. The result came after the company announced the restructuring of 8,000 in its push toward AI (artificial intelligence). The move cost $2.2 billion, affecting 8,000 jobs.
SAP's revenues increased 5% year-over-year in the fourth quarter of 2023. According to CNBC's report, this was SAP's best year since 2012 because its stock jumped about 50% this first month of the first quarter of 2024.
On Tuesday, Jan. 24, released a statement,
"In 2024, SAP will further increase its focus on key strategic growth areas, in particular Business AI."
Furthermore, SAP mentioned in the same statement its aim to capture "organizational synergies" and "AI-driven efficiencies."
The company also plans to execute a "company-wide transformation program." This affects approximately 8,000 positions, which "are expected to be covered by voluntary leave programs and internal reskilling measures."
What's Next for SAP?
SAP Chief Financial Officer Dominik Asam told CNBC that adapting to AI technology is part of the company's aim to "fully capitalize on the opportunity" of the next wave of fast-moving technology.
"The next big opportunity is artificial intelligence and we want to be well prepared for that," Asam said.
"That means we need to reskill our workforce, really focus on that," he added, noting that over the next two years, SAP will commit around $2 billion to the initiative.
What Will Happen to Some SAP's Job Positions?
Asam said some of its workforce would either reskill or transfer to new positions. He added that SAP "cannot exclude that there will also be non-voluntary departures," after implementing the changes.
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