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SAP is reorganising its business to focus more on cloud, other strategic initiatives

SAP is reorganising its business to focus more on cloud, other strategic initiatives

German software giant SAP announced a reorganisation this week that could impact up to 3 per cent of its global workforce as it continues to refocus its core business on cloud-based services.

An SAP spokesperson told BCN the company plans to scale down its activities in some areas as it moves forward with measures to refocus its business on cloud-based services, including its in-memory compute platform HANA and its Internet of Things offerings.

SAP’s cloud business grew 39 per cent in 2014 and 45 per cent year on year in the last quarter of last year.

“These measures will impact about 3 per cent of all global positions,” the spokesperson said, which is roughly equivalent to just over 2,000 people.

According to the spokesperson there will be no forced dismissals in Europe, and the company plans to deploy a combination of voluntary severance and upskilling programmes to achieve the reorganisation.

“SAP is and continues to be a growth company. We continue to invest in growth areas while implementing required changes in other areas, to ensure they are lean and efficient for the future.”

“This is not about cost-cutting. On the contrary: we continue to support employees who want to expand their skills and qualify for growth areas. In addition we will again create new positions in those growth areas and plan to have more employees at the end of 2015 than at the start of the year.”

SAP isn’t the only vendor that is looking to trim headcount in a bid to refocus its business model to account for a vastly different set of services and solutions. IBM is currently in the process of laying off thousands as it seeks to both cut costs and re-direct its business towards other services – cloud, analytics, and cognitive computing primarily.

The move seems to be part of a broader strategy only speculated at last year, when reports from the US suggested the German software firm would “lay off thousands of staff” as it looked to refocus on cloud – reports an SAP spoeksperson denied to BCN.

At the time the spokesperson said while the company could not “avoid restructuring efforts in certain areas” it planned to end up with more employees at the end of 2014 than it originally began with, a target it achieved. SAP ended up with 2,200 net new positions by the end of 2014, and 7,800 including mergers and acquisitions throughout the year.