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.



Saudi Transport Minister Launches Initial Operational Phase of Autonomous Vehicles 

Officials are seen at the launch ceremony in Riyadh. (SPA)
Officials are seen at the launch ceremony in Riyadh. (SPA)
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Saudi Transport Minister Launches Initial Operational Phase of Autonomous Vehicles 

Officials are seen at the launch ceremony in Riyadh. (SPA)
Officials are seen at the launch ceremony in Riyadh. (SPA)

Saudi Minister of Transport and Logistic Services and Chairman of the Board of the Transport General Authority Eng. Saleh Al-Jasser launched on Wednesday the Initial Operational Phase of Autonomous Vehicles in Riyadh.

This milestone marks a significant step aimed at enabling advanced technology and expanding the development of a smart and safe transportation ecosystem in the Kingdom.

The initiative aligns with the objectives of the National Transport and Logistics Strategy and is an extension of Saudi Vision 2030 towards adopting sustainable mobility solutions powered by the latest artificial intelligence technologies.

This project is the result of an integrated partnership that brings together the transport and logistics ecosystem and relevant stakeholders, including the Ministry of Interior, the Ministry of Communications and Information Technology ecosystem, the Saudi Data and AI Authority (SDAIA), the General Authority for Survey and Geospatial Information, and the Saudi Standards, Metrology and Quality Organization (SASO), in addition to private sector partners represented by technology and operations partners Uber, WeRide, and AiDriver.

The autonomous vehicles in this phase will operate within a real-world environment covering King Khalid International Airport and several key locations across Riyadh, including major highways and selected city center destinations.

This phase is implemented under the direct regulatory and technical supervision of the Transport General Authority. The vehicles will transport passengers with a safety officer onboard each vehicle to ensure safety and monitor the performance of smart systems in actual operating conditions.

Al-Jasser stressed that the launch of the initial operational phase reflects the Kingdom’s ambitious vision to build a smart and integrated transport system that supports economic growth and enhances quality of life.

Enabling modern technologies and developing regulatory and operational frameworks are key pillars to expanding the implementation of this technology and supporting the transformation of the transport sector, he added.

The initiative is an extension of the Kingdom’s efforts to promote sustainability, improve mobility efficiency, and localize innovation. This project represents a pioneering model of public-private partnership, paving the way for a future of safer and smarter mobility, he stated.