German software giant SAP has announced a significant restructuring plan, allocating over $2 billion to cut or retrain 8,000 roles.
The move aims to strategically shift focus toward the growth of artificial intelligence within the company.
SAP envisions generative AI as a fundamental transformation for the company and commits to investing over $1 billion in AI initiatives, including support for AI-powered startups through Sapphire Ventures.
The company plans to restructure to enhance concentration on key growth sectors, particularly in business AI. It will primarily involve voluntary leave programs and internal re-skilling measures for the affected roles.
The changes are expected to conclude by the end of 2024.
The company has made significant investments in integrating AI into its software offerings.
SAP uses artificial intelligence to help organizations automate routine tasks, improve operational efficiency, and centralize complex processes using its ERP platform.
The company is employing machine learning capabilities that analyze external and historical data to find patterns and behaviors.
This provides insights into the trends and history of machines, products, and systems.
The company also offers SAP AI Framework as an all-in-one AI toolkit that offers customizable, ready-to-use AI.
In late 2023, SAP launched Joule, a generative AI assistant, designed to enhance interactions with SAP business systems.
Joule serves as a conversational user interface integrated with SAP applications, providing a rich web client for a seamless experience.
SAP is the latest big tech company to announce a downsizing recently, following similar announcements by Meta, Amazon, and Google. This is seen as a drive for profitability using AI as a mechanism to increase productivity internally.