Walldorf (dpa) - Europe's largest software manufacturer SAP wants to drive forward its artificial intelligence (AI) business with a major reorganization. Around 8,000 employees will be affected by the plan, the DAX heavyweight announced late on Tuesday evening. The Walldorf-based company had already cut 3,000 jobs around a year ago in order to streamline its organization and focus more on its core business in the area of business management software.

"With the planned transformation program, we are increasingly shifting investments to strategic growth areas, primarily AI," said CEO Christian Klein. "This will enable us to continue to develop pioneering innovations in the future while improving the efficiency of our business processes." SAP will invest almost one billion euros in this area by the end of 2025, said Klein.

The hype surrounding AI in the software industry was sparked last year by the release of the chatbot ChatGPT. Since then, all software companies have been keen to get a slice of the hoped-for big future pie and are investing a lot of money in the technology.

Conversion costing two billion euros

Last year, SAP had already introduced its own products such as the AI assistant Joule, which is designed to make it easier for users to perform typical tasks in companies. Now, SAP CEO Klein is once again investing around two billion euros - that is the total cost of the restructuring program.

Part of the restructuring program is also a reorganization of the group structure, it was said. Voluntary programs and internal retraining are to take effect for most of the approximately 8,000 jobs affected. Due to investments in growth areas, SAP expects the number of employees at the end of the year to roughly correspond to the current level. It is currently impossible to predict how many of the 8,000 employees affected by the restructuring will still be working at SAP.

Making such decisions is never easy, said Klein. But it is about the best possible future for SAP and being able to keep up in the tech industry. According to Klein, around two thirds of the 8,000 affected employees will be encouraged to leave the company through voluntary measures such as early retirement or severance payments, or will be able to retrain for other positions, for example.

For the works council, it is important that the restructuring in Germany is a purely voluntary measure. A company spokesperson stated that redundancies for operational reasons are ruled out by a company agreement until the end of 2024. According to the statement, the works council called for the works agreement on job security to be extended beyond 2024 in order to provide employees with planning security.

The job cuts around a year ago did not lead to an overall reduction in the number of employees at the Walldorf-based company. At the end of December, SAP had 107,602 full-time employees, compared to 106,312 a year earlier. However, many of the employees affected at that time are no longer with SAP.

More speed in cloud sales and earnings

Klein and his CFO Dominik Asam have set themselves a faster pace for cloud sales and earnings in the current year than last year. Adjusted for special effects, earnings before interest and taxes are expected to grow by 17 to 21 percent, excluding exchange rate effects.

In the cloud, the subscriptions brought in should provide more impetus. Klein has set the sales teams a currency-adjusted sales increase of 24 to 27 percent as a benchmark.

Cloud products for use via the network have been the growth driver at SAP for some time. They are considered to be more profitable in the long term because customers pay more with a longer term than with the previously common package of licensed software for a high one-off fee and subsequent maintenance contract. Initially, however, the cloud contracts mean losses because the high sales prices of the license software are initially eliminated.

Making cloud offers palatable

AI and other innovations are to be reserved for the cloud versions of SAP's software in future, while the maintenance of certain products of permanently installed software will be phased out over time. In this way, Klein wants to make the cloud offerings more attractive to customers.

Overall, SAP increased its turnover by 6 percent to 31.2 billion euros. In day-to-day business, the adjusted operating result climbed by nine percent to 8.7 billion euros. In the final quarter, the lucrative license business in particular helped, which fell significantly less than previously estimated by experts.

Net profit rose to 5.9 billion euros, which was more than three times the previous year's profit. Above all, the billion-euro extraordinary income from the sale of the former US market research subsidiary Qualtrics drove the surplus upwards.