SAP to cut 2200 jobs as part of its Cloud-first strategy

SAP to cut 2200 jobs as part of its Cloud-first strategy

Similar amount of new posts will be created to better serve customers on SaaS model

SAP will cut 2200 jobs while creating a similar number as part of its refocusing as a cloud company.

The vendor will see around 3 per cent of its 75,000 strong global workforce leave this year.

However, it will create around a similar amount of new positions within Concur, the Cloud expense management firm it bought last year, as well as its existing cloud services and in-memory database Hana division.

SAP workers in Europe will be offered voluntary leave, and UK, German, France and US employees will be offered early retirement packages.

"There won't be any impact on customers. We will ensure that we have sufficient hand-over time between colleagues who might be leaving and others taking over," a company spokeswoman said today.

She declined to say which areas will be affected as the employees must still be informed of the company's plans, but added that the job cuts are necessary to ensure a solid financial foundation for the company.

S/4 Hana

SAP announced a new generation of its ERP - a SaaS model running on database Hana that promises to eliminate 40 per cent of SAP IT load by removing satellite systems - early this year. It was a bold move that will change the way firms' core systems will operate if they choose to follow SAP's road, or cloud, map.

The announcement signified the death of the IT stack and as today's announcement shows, a number of SAP's on-premise focused employees.

SAP have suffered other losses as of late, including a profit drop also due to its shift to a cloud-first business model which saw it buy up several cloud firms.

The vendor's cloud subscription numbers were boosted after it bought cloud firms Concur and Fieldglass; purchases which served to distract attention from the slow SaaS adoption within SAP's cloud-shy core customer base - indicating slow organic growth.

SAP chief executive Bill McDermott said: "2015 is all about accelerating the introduction of next generation applications on Hana and scaling the world's largest Business Network."

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