Germany-based software giant SAP SE has announced a groundbreaking €2 billion ($2.17 billion) company-wide transformation initiative for 2024, geared towards enhancing its focus on artificial intelligence (AI) and related areas.
The comprehensive program includes significant restructuring efforts aimed at optimizing operational efficiency and positioning the company for future scalable revenue growth.
Key Highlights of SAP SE’s Transformation Program:
- Strategic Focus on Generative AI: SAP SE is set to invest more than $1 billion in generative AI, solidifying its commitment to advancing AI-powered technologies. The company will actively support AI-driven startups through its enterprise capital firm, Sapphire Ventures.
- Workforce Restructuring: A crucial aspect of the transformation involves a targeted restructuring initiative impacting approximately 8000 employees. SAP SE anticipates managing most of these transitions through voluntary leaves and internal re-skilling programs. Despite these changes, the software giant projects ending the year with a headcount comparable to current levels, presently exceeding 105,000 employees.
- Financial Impact and Timeline: The expenses associated with the restructuring efforts will primarily impact the first half of 2024, affecting the operating profit. However, SAP SE foresees the program delivering only a ‘minor’ cost benefit for the year, excluding these restructuring expenses.
- Operational Synergies and AI-Driven Efficiencies: SAP SE’s transformation plan aims to reshape its operational setup to capture organizational synergies and leverage AI-driven efficiencies. The overarching goal is to prepare the company for highly scalable future revenue growth.
In unveiling this ambitious transformation program, SAP SE charts a course towards technological innovation and strategic growth in the dynamic landscape of artificial intelligence.
As the software major navigates these changes, it anticipates not only optimizing its operational structure but also fostering an ecosystem conducive to pioneering advancements in AI technologies.