German software firm SAP used third-party intermediaries to make improper payments to government officials in South Africa and other countries. (Photo: Alex Kraus/Bloomberg via Getty Images) 
The “majority” of the positions touched by the restructuring will be “covered by voluntary leave programmes and internal re-skilling measures,” SAP said Tuesday in a statement, adding that it expects to end the year with headcount virtually unchanged. The German software maker said the changes will be made throughout 2024 “to ensure that SAP’s skill-set and resources continue to meet future business needs.” SAP said it had 107,602 full-time workers as of 31 December.
Separately, SAP reported a 5% gain in fourth-quarter non-IFRS revenue to €8.47-billion. Analysts, on average, estimated €8.35-billion. Cloud sales increased 20% to €3.7-billion. Operating profit was €2.51-billion in the period ended 31 December, the company said, compared with an average estimate of €2.53-billion.
SAP, Europe’s biggest software company, has been focusing the past few years on transitioning its enterprise business to cloud subscriptions from a traditional licensing model. The company, like software rivals, is trying to incorporate AI tools into its products given the heightened demand for the technology.
“SAP is opening the next chapter: With the planned transformation program, we are intensifying the shift of investments to strategic growth areas, above all business AI,” CEO Christian Klein said in the statement.
The Walldorf, Germany-based company projected 2024 cloud and software revenue of €29-billion to €29.5-billion, an 8% to 10% increase excluding currency fluctuations. Non-IFRS operating profit will be as much as €7.9-billion, an increase of 21% in constant currency.
The company also gave an operating profit forecast of €10-billion for 2025, which reflects a reduction of €2-billion for share-based compensation expenses. The outlook includes €500-million due to “incremental” gains from the restructuring, SAP said. It continues to expect total revenue of at least €37.5-billion in 2025, including cloud sales of more than €21.5-billion.
On 10 January 2024, the US Securities and Exchange Commission released a report finding that between December 2014 and 2018, SAP used third-party intermediaries and consultants to make improper payments to government officials to get and retain business in South Africa, as well as other countries including Malawi, Kenya, Tanzania, Ghana and Indonesia.
The company has been fined R4-billion.
Additional reporting Daily Maverick.