Job cuts help SAP make up for slowing sales
Facebook Twitter google+ RSS Feed

Job cuts help SAP make up for slowing sales

By SiliconIndia   |   Thursday, 30 July 2009, 03:04 Hrs   |    21 Comments
Printer Print Email Email
Job cuts help SAP make up for slowing sales
Bangalore: SAP AG, a business software giant has raised its full year forecast for profitability since it has been able to make up for its slowing sales through job cuts. SAP has eliminated around 2,800 of the 3000 jobs it plans to cut this year to make up for falling revenue.

SAP said that costs linked to the measures, the first since it was founded in 1972, will be 200 million euros ($283 million), at the low end of its previous prediction, reports Bloomberg. SAP has made 500 million euros in cost savings and aims for 600 million euros to 700 million euros a year, said Leo Apotheker, CEO.

"They've done a good job by getting ahead of their original forecast" for job cuts, said Bernd Laux, a Frankfurt- based analyst at Cheuvreux in Frankfurt who has an "underperform" rating on the stock and a price target of 33 euros. "They need a return to sales growth."

Total second-quarter sales fell 10 percent to 2.58 billion euros from 2.86 billion euros a year earlier, SAP said. Net income rose to 423 million euros in the quarter from 408 million euros a year earlier. Its operating margin for the second quarter came in at 27.7 percent versus the 24.4 percent predicted by analysts, compensating for a 40 percent slide in software sales.

Apotheker said that in the medium term, SAP wants to double its product revenue. He also added that he may spend as much as five billion euros on takeovers to win market share from competitors. "If there are opportunities, we won't hesitate and we will move ahead," Apotheker said. "It could be large or small."

Write your comment now
Submit Reset
Reader's comments(21)
1: If profits are good then companies never share profits , but companies are under loss . then they are sharing their losses by removing employees. this is completely unjustice.
Posted by:Pradeep - 30 Jul, 2009
2:
no my friend this is not so true companies may share ther profits to the employee.yes its is unjustice to remove the employee but if employee gives there 100 percent in the company n they love there company they will surely ready to bear there losss also.no company will stand without the good relationship of the employee as well as the company.the thing is the employee should be calm and try to understand the prob.so the company should know what there employee want when employee and the company member go together than only the company will go futher and will be able to stand.what is good in to lock out?employee will do there own loss as well company has been already in loss.so its better to go away or to terminate the employee company shold corporate even employee also corporate.
vishwas Replied to: Pradeep - 30 Jul, 2009
3:
Well in the name of recession, many companies have already laid off. It certainly helps in terms of cost cutting but how long will this go on?
AJAY GHODADARA Replied to: Pradeep - 30 Jul, 2009
4:
Well in the name of recession, many companies have already laid off. It certainly helps in terms of cost cutting but how long will this go on?
AJAY GHODADARA Replied to: Pradeep - 30 Jul, 2009
5:
Well in the name of recession, many companies have already laid off. It certainly helps in terms of cost cutting but how long will this go on?
AJAY GHODADARA Replied to: Pradeep - 30 Jul, 2009
6:
Well in the name of recession, many companies have already laid off. It certainly helps in terms of cost cutting but how long will this go on?
AJAY GHODADARA Replied to: AJAY GHODADARA - 30 Jul, 2009
7:
shut....up...
SAP Replied to: AJAY GHODADARA - 30 Jul, 2009
8:
U shut UP,,,,,,,,,,
AJAY is saying the right thing.
U company guys make merry till this recession last.
Watch it out , one day when the market is up , u guys will be begging people to join u , n u know wat u will end up paying the unaffordable salaries.
N u bet thats gonna happen soon
ash Replied to: SAP - 30 Jul, 2009
9:
Dear Private companies are established for profit as long as they make profit its fine otherwise its a known thing that they will show you the door, Put yourself in thier shoes than you will understand, they are not government organizations where everything is taken for granted.

No one is going to come to thier rescue.

deke Replied to: ash - 30 Jul, 2009
10:
Every dog has a day.
Sukesh Nigam Replied to: ash - 30 Jul, 2009
11: This is only a short term solution it seems. Do SAP reduce license fee? There is a strong wave of 'software valuation' across business domains and geographies. Business owners are reluctant to invest millions towards ERP. Some of them are looking at onDemand ERP products like workday and Ramco onDemand. Even Indian companies are cutting IT budget and taking comprehensive HRMS suites with a price cap of 25 Lakhs. SMEs showing inclination towards onDemand application like Greytip Online, Salesforce...
Posted by:Sreekumar J - 29 Jul, 2009
12:
Well in the name of recession, many companies have already laid off. It certainly helps in terms of cost cutting but how long will this go on?
AJAY GHODADARA Replied to: Sreekumar J - 30 Jul, 2009
13: Well in the name of recession, many companies have already laid off. It certainly helps in terms of cost cutting but how long will this go on?
Posted by:shiny - 29 Jul, 2009
14:
Well in the name of recession, many companies have already laid off. It certainly helps in terms of cost cutting but how long will this go on?
AJAY GHODADARA Replied to: shiny - 30 Jul, 2009
15:
This is just to exploit HUMAN RESOURCES, In many companies employers are making people work for 9 and 1/2 hrs. ex. WIPRO, CAPGEMINI, INFOSYS etc.
Not only in INDIA but even in US too. If indian and US and other countries governments take action then the employment will start.
Neel Replied to: shiny - 29 Jul, 2009
16:
Well in the name of recession, many companies have already laid off. It certainly helps in terms of cost cutting but how long will this go on?
AJAY GHODADARA Replied to: Neel - 30 Jul, 2009
17:
Job cuts are the most common practice in the IT sector. Not only in recession but also in good times some companies are following this. Now days, many companies are taking undue advantages of the current situation. Hire employees, use them badly and finally one fine day ask them to leave. God! This is really an inhuman behavior. These employees drive the projects with their full zest so that companies just don’t consider them when they fire but of no use. They forget that these people have their families and need basic things to survive. My suggestion is why just sacking a employee is the only option why not from top to bottom you cut down the salaries to 50% so that everyone can survive at least. Why one person is enjoying butter with bread when other person is denied for bread. Please stop this injustice.
rks Replied to: AJAY GHODADARA - 30 Jul, 2009
18:
Well said RSK,
Truth is that we all are leading towards a tempting life.Now a days when a young man starts his or her career they need everything,from the big car,home,leisure life etc n all and to get this they opt private sector job. No doubt they get all the things but at the cost of moral values,ethics,quality of life,respect,social life,physical health.Companies r taking blood from us...while paying handsome salaries.There should be a autonomous govt body like SEBI,IRDA,,ETC to regulate and stop this practice of pvt companies
pankaj Replied to: rks - 31 Jul, 2009
19:
This is just to exploit HUMAN RESOURCES, In many companies employers are making people work for 9 and 1/2 hrs. ex. WIPRO, CAPGEMINI, INFOSYS etc.
Not only in INDIA but even in US too. If indian and US and other countries governments take action then the employment will start.
AJAY GHODADARA Replied to: Neel - 30 Jul, 2009
20:
SAP Sucks
Siebel Replied to: AJAY GHODADARA - 30 Jul, 2009
21:
True .. its all fake news .. they have done job cuts and are now hiring as well.. their management has done some miserable mistakes .. thier managers and directors have formeed teams of no use .. althought there the work culture is really good.. but their decision making professionally is very bad..they cnt think properly .. most of direclty cnt take independent decisions for their teams speacially SAP LABS India
Anti - SAP Replied to: Siebel - 31 Jul, 2009
SPOTLIGHT