Dive Brief:
- SAP is preparing for a companywide AI-focused restructuring that will impact around 8,000 jobs, the Walldorf, Germany-based software vendor said Wednesday.
- “The majority of the approximately 8,000 affected positions is expected to be covered by voluntary leave programs and internal re-skilling measures,” the company said in a statement. SAP said it expects to end the year at a headcount similar to current levels.
- SAP plans to spend around $2.18 billion (2 billion euros) on restructuring expenses, the vast majority of which will be recognized in the first half of 2024. SAP expects the transformation plan to bring a minor cost benefit in 2024, excluding restructuring expenses.
Dive Insight:
Like most enterprise tech vendors, SAP is embracing the generative AI shift and the disruption that accompanies it.
While SAP is focused on reskilling internally, the company also anticipates investing nearly $1.09 billion into developing AI use cases for customers over the next two years, according to CEO Christian Klein, speaking during the company’s earnings call Wednesday.
SAP’s internal shift comes after months of embedding generative AI in its products. The software vendor laid out plans to embed its natural language assistant Joule across its cloud enterprise portfolio, apps and Business Technology platform in September. The company also launched a coding assistant powered by Joule in November.
Training is a key way businesses are looking to upskill employees for growing AI use. Nearly all IT pros and executives consulted in a Pluralsight report believe AI initiatives will fail without skilled teams that can effectively use and work with these tools.
