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As traditional companies like IBM, Oracle and SAP In an attempt to transform themselves into more modern cloud computing companies, they find that this transition, while absolutely necessary, may require difficult adjustments along the way. This morning again, SAP announced its restructuring to save between 750 million and 800 million euros (between about 856 and 914 million dollars).
Although the company has tried to portray this announcement as positively as possible, this could involve up to 4,000 job cuts, as SAP turns to more modern technologies. "We will move our staff and focus on the areas in which the new economy is most in need of SAP: Artificial Intelligence, Deep Learning, IoT, Blockchain and Quantum Computing," said Chief Executive Officer Bill McDermott at the conference. a press conference after the publication of the profit.
If it sounds familiar, it should. It is precisely in these areas that IBM is trying to focus on its transformation in recent years. IBM has struggled to make this change and has also defined downsizing as a shift to modern skills. It should be noted that SAP's financial situation is more positive than IBM's.
CFO Luca Mucic insisted that it was not meant to reduce costs, but to ensure the long-term health of the company, but admitted that this implied job cuts. These could include early retirement and other incentives to leave the company voluntarily. "We still expect a slightly higher number than the 2015 program, in which approximately 3,000 employees left the company. At the end of this process, SAP will leave, "he said.
The company estimates that despite these reductions, the number of employees will be higher by the same date next year, but they will be transferred to these new areas. technology. "This is a growth initiative, not a cost reduction, every dollar raised through a restructuring initiative will be reinvested in the workforce and the creation of new jobs," he said. said McDermott. SAP continued to emphasize that cloud revenues will reach $ 35 billion by 2023.
Holger Mueller, an badyst who monitors companies such as SAP for Constellation Research, says the company is doing what it needs to do in terms of transformation. "SAP is upgrading its product portfolio to meet the demands of its 21st century customer base," Mueller told TechCrunch. He added that it was not easy to implement and that new skills were needed to build, operate and sell new technologies.
McDermott noted that the company would offer a generous severance package to any employee who would leave the company as a result of today's announcement.
Today's announcement comes after the company made two multi-billion dollar acquisitions to ease the transition in 2018 – $ 8 billion for Qualtrics and $ 2.4 billion for CallidusCloud.
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