Two significant employers in Ireland, German software giant SAP, and American tech giant IBM plan to cut their global workforces as part of the most recent round of layoffs in the technology sector.
In connection with some asset divestments, IBM disclosed 3,900 layoffs on Wednesday.
James Kavanaugh, the company’s chief financial officer, said that the company was “committed to hiring for client-facing research and development.” IBM still expects to hire in the “higher-growth areas,” he said.
The cuts will focus on workers remaining after spinning off the Kyndryl and Watson Health units and will cost the company about $300 million, Kavanaugh said.
SAP, meanwhile, said it planned to cut 3,000 jobs, or 2.5 per cent of its global workforce, and explore the sale of its remaining stake in Qualtrics, as the Germany software company looks to cut costs and focus on its cloud business. SAP Chief Executive Officer Christian Klein said the job cuts were a strategic move and “not related to our business momentum.”
SAP is the most recent tech company to slash jobs, following announcements of thousands of layoffs by Alphabet’s Google, Microsoft, and Amazon as they prepare for more challenging economic conditions.
“We expect only a moderate cost saving impact for 2023, and a more pronounced one in 2024, about 300 million euros to 350 million in run rate savings as of 2024,” chief financial officer Luka Mucic said in a call with journalists.
The company will eliminate a little over 200 jobs in Germany, where SAP is headquartered.
The layoffs follow SAP’s fourth-quarter cloud business revenue increase of 30%, which was boosted by strong software demand.
Additionally, SAP has begun the process of selling its interest in Qualtrics. In 2018, it paid $8 billion for the company, and in 2021, it went public with a valuation of almost $21 billion.
Currently, SAP owns a 71% stake in Qualtrics, a provider of survey software, and the company is valued at $7 billion.