SAP to reduce 2.5% of its global workforce, also to sale its Qualtrics stake

SAP planned to reduce 2.5% of its global workforce or 3,000 jobs. The company is also exploring the sale of its remaining stake in Qualtrics. It is because the company is looking to cut costs and focus on its cloud business.

“We expect only a moderate cost saving impact for 2023, and a more pronounced one in 2024, about 300 million euros to 350 million in run rate savings as of 2024,” Chief Financial Officer Luka Mucic said in a call with the media

SAP is headquartered in Germany and there the company will cut slightly more than 200 jobs.

The announcement of layoffs comes after SAP in the fourth quarter reported a 30% revenue increase in its cloud business aided by strong demand for its software.

SAP has also started the process to sell its stake in Qualtrics. It bought the company for $8 billion in 2018 and took it public in 2021 at a valuation of nearly $21 billion.

Currently, survey-software seller Qualtrics has a market value of $7 billion and SAP has a 71% stake.

“(The sale) would result in a quite significant one-time gain,” Mucic said. “This would materially increase the profit performance of SAP, but it’s currently not reflected in the outlook.”

SAP forecast core operating profit of 8.8-8.9 billion euros at constant currencies for this year. It also expects cloud revenue at constant currencies for 2023 to rise to 15.3-15.7 billion euros, from 12.56 billion euros last year.