By Archibald Preuschat and Friedrich Geiger
FRANKFURT-- SAP SE said it plans job cuts that could affect as
much as 3% of its current global workforce, as the German software
company transitions from offering installed applications to a
cloud-based business model.
The company declined to specify the exact number of cuts, but
said 2,200 employees would be affected in some way by the
restructuring. It said that even as it was paring staff, it was
also hiring for new positions, and expects to have more staff at
the end of the year than at the start.
It said some staff deemed redundant in the transition will be
trained for other positions. Those unwilling or unable to qualify
for new positions will be asked to leave, it said. In Europe,
affected staff will be offered early retirement or other
compensation, a spokesman said.
SAP declined to say where other job changes would take place.
SAP's global workforce numbered 74,400 at the end of 2014, with
16,000 based in the U.S.
SAP's changing personnel requirements reflect a major transition
of its business model. It is shifting its offering to applications
that are accessed over the Internet from on-premise software.
The transition is taking a toll on the company's performance. In
January, SAP dropped its medium-term profit margin guidance and
reported a 1% slide in fourth-quarter net profit, partly because
cloud products initially generate less revenue than installed
software, which has a higher one-time purchase price.
However, cloud applications don't require employees that install
and update software on customers' computers, reducing SAP's need
for support staff.
Software developers make up the majority of SAP's U.S. staff,
suggesting that the country won't be heavily affected by job cuts.
A quarter of the company's U.S. staff work in the Bay Area.
The plan comes after similar personnel moves last year, which
affected about 2,000 employees. A large number of those have been
moved to other positions at SAP, the company said.
Write to Archibald Preuschat at archibald.preuschat@wsj.com and
Friedrich Geiger at friedrich.geiger@wsj.com
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