2200 jobs go up in smoke as SAP heads to cloud

German software giant SAP said Friday that it would eliminate 2,200 positions as it accelerates its shift to delivering businesses its accounting and management applications via the Internet "cloud", but would avoid forced layoffs.
SAP intends to "cut three percent of positions ... over the short to medium-term," a spokesman said Friday, confirming plans reported by Bloomberg News.
That would make for 2,250 jobs in the company that employs 74,400 people.
The plan does not include any forced layoffs, with the reduction to be achieved by voluntary departures and retraining of people employed in less profitable units, said the spokesman who noted that SAP created 7,800 jobs last year.
"This isn't a question of cost-cutting, rather we want to support our growth in a good manner," he said.
SAP is in the midst of a massive shift to cloud computing, which it hopes will lift annual revenues by around 50 percent to 26-28 billion euros ($28.5-30.7 billion) by 2020.
Cloud computing is a different way of delivering applications and services to companies and consumers, and implies some changes within the company.
Programs are hosted in the Internet "cloud" rather on a client's server or computer and delivered via broadband connections, thus opening up many possibilities to tailor services to just what is needed and reducing the need for businesses to buy and maintain equipment.
In January, SAP executives said they expect revenue from subscriptions to cloud-based services to exceed sales of traditional software licences in 2018.