(Bloomberg) -- SAP SE said it will explore a sale of its remaining stake in Qualtrics International Inc. and will start a restructuring that will eliminate 2.5% of its employee roles this year as the company looks for ways to boost profit.
Most Read from Bloomberg
Hindenburg's Short Sell Call Shaves $12 Billion Off Adani Stocks
NYSE Mayhem Traced to a Staffer Who Left a Backup System Running
IBM to Cut About 3,900 Workers, Still Hiring in 'Higher Growth' Areas
Hindenburg vs Adani: The Short Seller Taking on Asia's Richest Person
Tech-Led Slide Fades; Tesla Whipsaws on Earnings: Markets Wrap
Adjusted operating profit for 2023 will rise to €8.8 billion ($9.6 billion) to €9.1 billion at constant currencies, the Walldorf, Germany-based software company said in a statement on Thursday. That beat the average €8.65 billion forecast by analysts in a Bloomberg survey.
The job cuts amount to about 3,000 roles. SAP is joining a growing list of tech companies that are eliminating jobs and looking for ways to cut costs after share prices dropped last year.
"The process will take a while," Chief Financial Officer Luka Mucic said about the cuts. "We expect only a moderate cost saving impact for 2023 and a more pronounced one in 2024."
The company said that the purpose of the reorganization and a motivation for the Qualtrics sale is to refocus on its largest business, cloud services. The cloud business became SAP's largest revenue stream last year. Earlier this month, Moody's improved SAP's outlook to positive because of the company's transition.
Read More: SAP Operating Profit Guide Key for Bull-Bear Debate: Preview (1)
The restructuring will cost the company €250 million to €300 million, with most of that recognized in the first quarter of this year. "The program is expected to provide a moderate cost benefit" for the full year and will save €300 million to €350 million in annual costs in 2024, the company said.
SAP's cloud revenue rose 22% in constant currencies in the fourth quarter from a year earlier, to €3.39 billion.
The company's current cloud backlog is €12 billion, an increase of 24% at constant currencies.
SAP says Qualtrics's results are currently included in the 2023 outlook.
Most Read from Bloomberg Businessweek
How to Be 18 Years Old Again for Only $2 Million a Year
Wind Turbines Taller Than the Statue of Liberty Are Falling Over
Elon Musk's Epic Quest for LOLs Is Only Hurting Tesla
Is Europe Sleepwalking Into Another War?
The US Hasn't Noticed That China-Made Cars Are Taking Over the World
©2023 Bloomberg L.P.