{"id":14063,"date":"2019-01-29T18:43:38","date_gmt":"2019-01-29T18:43:38","guid":{"rendered":"https:\/\/rsoftsolution.com\/blog\/sap-job-cuts-prove-harsh-realities-of-enterprise-transformation.html"},"modified":"2019-01-29T18:43:38","modified_gmt":"2019-01-29T18:43:38","slug":"sap-job-cuts-prove-harsh-realities-of-enterprise-transformation","status":"publish","type":"post","link":"https:\/\/www.rbsitsoftwaresolution.in\/blog\/sap-job-cuts-prove-harsh-realities-of-enterprise-transformation.html","title":{"rendered":"SAP job cuts prove harsh realities of enterprise transformation"},"content":{"rendered":"

As traditional enterprise companies like IBM, Oracle and SAP <\/a> try to transform into more modern cloud companies, they are finding that making that transition, while absolutely necessary, could require difficult adjustments along the way. Just this morning, SAP announced that it was restructuring in order to save between $750 million and 800 million euro (between approximately $856 million an $914 million).<\/p>\n

While the company tried to put as positive a spin on the announcement as possible, it could involve up to 4000 job cuts as SAP shifts into more modern technologies. \u201cWe are going to move our people and our focus to the areas where the new economy needs SAP the most: artificial intelligence, deep machine learning, IoT, blockchain and quantum computing,\u201d CEO Bill McDermott told a post-earnings press conference.<\/p>\n

If that sounds familiar, it should. It is precisely the areas that IBM has been trying to concentrate on its transformation over the last several years. IBM has struggled to make this change and has also framed workforce reduction as moving to modern skill sets. It\u2019s worth pointing out that SAP\u2019s financial picture has been more positive than IBM\u2019s.<\/p>\n

CFO Luca\u00a0Mucic tried to stress this was not about cost cutting, so much as ensuring the long-term health of the company, but did admit it did involve job cuts. These could include early retirement and other incentives to leave the company voluntarily. \u201cWe still expect that there will be a number probably slightly higher than what we saw in the 2015 program where we had around 3000 employees leave the company, where at the end of this process will leave SAP,\u201d he said.<\/p>\n

The company believes that in spite of these cuts, it will actually have more employees by this time next year than it has now, but they will be shifted to these new technology areas. \u201cThis is a growth company move, not a cost cutting move every dollar that we gain from a restructuring initiative will be invested back into headcount and more jobs,\u201d McDermott said.\u00a0SAP kept stressing that cloud revenue will reach $35 billion in revenue by 2023.<\/p>\n

Holger Mueller, an analyst who watches enterprise companies like SAP for Constellation Research, says the company is doing what it has to do in terms of transformation. \u201cSAP is in the midst of upgrading its product portfolio to the 21st century demands of its customer base,\u201d Mueller told TechCrunch. He added that this is not easy to pull off, and it requires new skill sets to build, operate and sell the new technologies.<\/p>\n

McDermott stressed that the company would be offering a generous severance package to any employee leaving the company as a result of today\u2019s announcement.<\/p>\n

Today\u2019s announcement comes after the company made two multi-billion dollar acquisitions to help in this transition in 2018, paying $8 billion for Qualtrics<\/a>\u00a0and $2.4 billion for CallidusCloud<\/a>.<\/p>\n

\n

SAP agrees to buy Qualtrics for $8B in cash, just before the survey software company\u2019s IPO<\/a><\/p>\n<\/blockquote>\n

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Article source: http:\/\/feedproxy.google.com\/~r\/techcrunchIt\/~3\/sva-AYdA5AE\/<\/p>","protected":false},"excerpt":{"rendered":"

As traditional enterprise companies like IBM, Oracle and SAP try to transform into more modern cloud companies, they are finding that making that transition, while absolutely necessary, could require difficult <\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[19],"tags":[25],"class_list":["post-14063","post","type-post","status-publish","format-standard","hentry","category-enterprise-software","tag-enterprise"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t