SAP will cut between 1,500 and 2,000 employees from its roster as the firm reorganizes itself to focus on cloud computing.
The German software company said that targeted job cuts are on the horizon, according to Reuters. While there is no definitive number, the company — which employs approximately 67,000 people — is likely to lose at least 1,500, an unnamed source told the publication. The source also said:
The number is not yet definite and there are still checks being made as to whether positions overlap or are unnecessary.
SAP has argued that a number of cloud executive positions are no longer necessary due to the firm's restructuring efforts, which have led to requirements for different skill sets, job roles and technological expertise. In addition, the job cuts are expected to affect all regions and areas in which SAP operates. Concerning potential job cuts, SAP spokesman Andy Kendzie told ZDNet:
This initiative is about simplifying SAP for the customer, not about job cuts. In fact our plan is that we will have more employees at the end of 2014 than at the beginning of the year. While we cannot avoid restructuring efforts in certain areas, we will continue to invest in our innovation leadership and become the cloud company.
However, the news isn't completely bleak. SAP also reportedly plans to create an additional 3,000 roles this year.
Cloud computing is one method businesses use to cut down operational costs by removing the need to invest in personal server sets and using remote data centers instead. Despite SAP's wish to "become the cloud company," the company relies heavily on licensing and maintenance revenue, and so it will be interesting to monitor how this reorganization impacts on SAP's future growth.