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SAP to Restructure 8,000 Jobs in Push towards AI, Shares Hit Record

The logo of SAP is seen on their offices in Reston, Virginia, U.S., May 12, 2021. Picture taken May 12, 2021. REUTERS/Andrew Kelly/File Photo
The logo of SAP is seen on their offices in Reston, Virginia, U.S., May 12, 2021. Picture taken May 12, 2021. REUTERS/Andrew Kelly/File Photo
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SAP to Restructure 8,000 Jobs in Push towards AI, Shares Hit Record

The logo of SAP is seen on their offices in Reston, Virginia, U.S., May 12, 2021. Picture taken May 12, 2021. REUTERS/Andrew Kelly/File Photo
The logo of SAP is seen on their offices in Reston, Virginia, U.S., May 12, 2021. Picture taken May 12, 2021. REUTERS/Andrew Kelly/File Photo

Shares of SAP SE jumped 7% to an all-time high after the German software firm forecast growth in cloud revenue and said it will restructure roles for 8,000 jobs to focus on growth in artificial intelligence (AI)-driven business areas.
The company said it will spend 2 billion euros ($2.2 billion) on the program to either retrain employees with AI skills or to replace them through voluntary redundancy programs.
SAP, which expects to end 2024 with a headcount similar to current levels, started experimenting with OpenAI's ChatGPT as soon as the generative AI technology started gaining traction and announced plans to embed it in its products early last year, Reuters said.
The German company now expects GenAI to fundamentally change its business and has pledged to invest more than $1 billion by backing AI-powered technology startups through its investment arm Sapphire Ventures.
"The right adjustments are being made and the company is being reorganized to prepare it for the age of artificial intelligence," said investment strategist Jürgen Molnar at brokerage RoboMarkets.
"Even if some employees are likely to fall by the wayside, HR policy is less of a cost issue and more of a strategic one, in which many new opportunities are also likely to arise," he said.
Tech companies including global giants such as Google and Microsoft have embarked on a wave of layoffs in recent months as they look to shift their focus to artificial intelligence software and automation to lighten workloads.
Most of the restructuring costs would be in the first half of the year, and contribute 500 million euros to operating profit in 2025 due to efficiency improvements.
STRONG OUTLOOK
The business software maker, separately on Tuesday, forecast double-digit percentage growth in revenue from its key cloud business and overall operating profit for the current year after those 2023 figures met or exceeded analyst consensus.
Cloud revenue is expected to increase 24%-27% in 2024, SAP said, after reporting 23% growth, adjusted for currency effects, to 13.66 billion euros in 2023, in line with consensus.
Operating profit rose a currency-adjusted 13% last year, to 8.7 billion euros, beating predictions by analysts commissioned by the company of an increase of 9%. For 2024, SAP expects that figure to grow between 17% and 21%.
"We kept our promise and achieved double-digit non-IFRS operating profit growth despite an adverse macro environment," said SAP Chief Financial Officer Dominik Asam, who said he intends to further increase profitability in the current year.
The company separately adjusted its medium-term outlook on Tuesday to take into account a change in accounting practices, lowering its 2025 operating profit target to 10 billion euros from about 11.5 billion euros previously.

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Technology

Meta Abruptly Ends US Fact-checks Ahead of Trump Term

Attendees visit the Meta booth at the Game Developers Conference in San Francisco on March 22, 2023. (AP)
Attendees visit the Meta booth at the Game Developers Conference in San Francisco on March 22, 2023. (AP)
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Meta Abruptly Ends US Fact-checks Ahead of Trump Term

Attendees visit the Meta booth at the Game Developers Conference in San Francisco on March 22, 2023. (AP)
Attendees visit the Meta booth at the Game Developers Conference in San Francisco on March 22, 2023. (AP)

Social media giant Meta on Tuesday slashed its content moderation policies, including ending its US fact-checking program on Facebook and Instagram, in a major shift that conforms with the priorities of incoming president Donald Trump.

"We're going to get rid of fact-checkers (that) have just been too politically biased and have destroyed more trust than they've created, especially in the US," Meta founder and CEO Mark Zuckerberg said in a post.

Instead, Meta platforms including Facebook and Instagram, "would use community notes similar to X (formerly Twitter), starting in the US," he added.

Meta's surprise announcement echoed long-standing complaints made by Trump's Republican Party and X owner Elon Musk about fact-checking that many conservatives see as censorship.

They argue that fact-checking programs disproportionately target right-wing voices, which has led to proposed laws in states like Florida and Texas to limit content moderation.

"This is cool," Musk posted on his X platform after the announcement.

Zuckerberg, in a nod to Trump's victory, said that "recent elections feel like a cultural tipping point towards, once again, prioritizing speech" over moderation.

The shift came as the 40-year-old tycoon has been making efforts to reconcile with Trump since his election in November, including donating one million dollars to his inauguration fund.

Trump has been a harsh critic of Meta and Zuckerberg for years, accusing the company of bias against him.

The Republican was kicked off Facebook following the January 6, 2021, attack on the US Capitol by his supporters, though the company restored his account in early 2023.

Zuckerberg, like several other tech leaders, has met with Trump at his Mar-a-Lago resort in Florida ahead of his January 20 inauguration.

Meta in recent days has taken other gestures likely to please Trump's team, such as appointing former Republican official Joel Kaplan to head up public affairs at the company.

He takes over from Nick Clegg, a former British deputy prime minister.

Zuckerberg also named Ultimate Fighting Championship (UFC) head Dana White, a close ally of Trump, to the Meta board.

Kaplan, in a statement Tuesday, insisted the company's approach to content moderation had "gone too far."

"Too much harmless content gets censored, too many people find themselves wrongly locked up in 'Facebook jail,'" he said.

As part of the overhaul, Meta said it will relocate its trust and safety teams from liberal California to more conservative Texas.

"That will help us build trust to do this work in places where there is less concern about the bias of our teams," Zuckerberg said.

Zuckerberg also took a shot at the European Union "that has an ever increasing number of laws institutionalizing censorship and making it difficult to build anything innovative there."

The remark referred to new laws in Europe that require Meta and other major platforms to maintain content moderation standards or risk hefty fines.

Zuckerberg said that Meta would "work with President Trump to push back against foreign governments going after American companies to censor more."

Additionally, Meta announced it would reverse its 2021 policy of reducing political content across its platforms.

Instead, the company will adopt a more personalized approach, allowing users greater control over the amount of political content they see on Facebook, Instagram, and Threads.

AFP currently works in 26 languages with Facebook's fact-checking program, in which Facebook pays to use fact-checks from around 80 organizations globally on its platform, WhatsApp and on Instagram.

In that program, content rated "false" is downgraded in news feeds so fewer people will see it and if someone tries to share that post, they are presented with an article explaining why it is misleading.

Community Notes on X (formerly Twitter) allows users to collaboratively add context to posts in a system that aims to distill reliable information through consensus rather than top-down moderation.

Meta's move into fact-checking came in the wake of Trump's shock election in 2016, which critics said was enabled by rampant disinformation on Facebook and interference by foreign actors like Russia on the platform.