As the next heavyweight in the tech industry, computer group IBM and Europe’s largest software manufacturer SAP are cutting several thousand jobs. There are about 3,900 jobs, about 1.5 percent of the global workforce, IBM CFO James Kavanaugh told Bloomberg. At SAP, about 3,000 jobs will disappear as part of a restructuring, CEO Christian Klein announced on Thursday.
With the job cuts, SAP wants to focus on growth in the traditional corporate management software (ERP) area, Klein said. The cuts will come in other areas. CFO Luka Mucic stated that there should also be layoffs. With this step, the company wants to reduce annual costs by 350 million euros. Most of these savings are not expected to take effect until 2024.
In the past financial year, the software manufacturer achieved its annual objectives with a decent last quarter in the day-to-day business. Profit before interest and taxes adjusted for special effects fell by two percent to EUR 8.03 billion last year, annual revenue increased by eleven percent to EUR 30.9 billion, partly due to the business revival with cloud software for use over the network .
The bottom line is that net profit fell by no less than two-thirds to 1.71 billion euros, mainly because risk investments in start-ups no longer generated as much valuation income as before.
Quarterly revenue at IBM stagnates
IBM reported last quarter revenue on Wednesday at last year’s level of $ 16.7 billion (about 15.3 billion euros). The yield was therefore slightly above analysts’ expectations. Meanwhile, earnings grew 17 percent to $2.9 billion.
IBM boss Arvind Krishna is working to better align the IT and consulting group with the cloud business. Over the past year as a whole, revenue from cloud offerings increased 11 percent to $22.4 billion.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
