SAP Shares Surge on 8,000-Job Restructuring to Build Out AI

(Bloomberg) — SAP SE shares jumped the most in more than three years after the German software company said it’s planning a restructuring that will affect about 8,000 jobs and increase its focus on artificial intelligence. The company projected that operating profit would rise to roughly €10 billion ($10.9 billion) next year as result.

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The shares jumped 7.1% at 9:10 a.m. in Frankfurt after earlier jumping as much as 7.5% to €160.58, the biggest intraday gain since July 2020 and a record high.

As part of the restructuring this year, SAP will increase its focus on strategic growth areas, particularly artificial intelligence for business and identify “AI-driven efficiencies” in its operations, it said in a statement late Tuesday. While the company didn’t immediately respond to a request for comment on how many people will lose their jobs, it said in the filing that it plans to end 2024 with a headcount similar to current levels because of “re-investments” in other areas.

Europe’s biggest software company is working to stay competitive with rivals for its base of corporate customers. After spending the past few years transitioning its enterprise business to cloud subscriptions, SAP is focusing on ramping up AI integration into its software, using the technology to help retailers predict orders and pushing out a generative AI assistant, named Joule.

“The next phase is all about an ongoing transformation,” Chief Executive Officer Christian Klein said in an interview on Bloomberg TV. “We are investing in AI, over a billion for the next two years, while of course we’re also applying AI internally. So we will try for higher automation, automation of activities. It’s all about re-skilling and making sure that SAP on its own becomes more productive.”

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The German software giant also invested in Aleph Alpha GmbH, Anthropic PBC and Cohere last year, with plans to add more AI services.

In May, SAP also announced a…