SAP has announced an expansion of its restructuring program, which is expected to increase the number of jobs affected by a staggering 20%.
The news comes after the company reported higher revenue in its most recent quarter, but lower operating profit.
Initially, SAP projected that its restructuring would impact around 8,000 workers globally, however estimates now sit at 9,000-10,000.
SAP ‘restructuring’
Although the company has dubbed the move a restructuring effort, the European Works Council described it as a “euphemism” for headcount reduction.
SAP CFO Dominik Asam told investors: “We now estimate that between 9,000 and 10,000 positions will be affected with the corresponding impact on restructuring provisions, cash out and run rate savings after completion of the program.”
Asam added: “It’s important to note that the increase in the number of affected positions does not imply complete elimination of these roles but allows us to refine our setup in terms of skills and locations.”
SAP employs around 100,000 worker worldwide, many of whom are set to see significant changes to their roles or teams. During the second quarter, operating profit dropped from €1.4 billion to €1.2 billion in the space of a year despite a 10% increase in revenue to €8.3 billion. Restructuring costs accounted for €600 million during the three-month period.
Company CEO Christian Klein’s comment offered a harsher illustration of the ongoing restructuring efforts: “We continued to execute on our transformation program with great discipline, rehiring only for the skill sets we need.”
Despite its impacts on operating profit, shares in the company rose 7% following its recent earnings announcement.
Via The Register
More from TechRadar Pro
https://cdn.mos.cms.futurecdn.net/KrzT5MkZ7pQERcvimKN9ve-1200-80.png
Source link
