SAP cuts likely to reach Israel

SAP co-CEO Leo Apotheker: The cost containment measures will allow us to adapt to the tough market conditions and ensure long term competitiveness.

SAG AG (NYSE; XETRA: SAP) yesterday announced that it cut its global workforce by 6%, amounting to 3,000 employees. The cuts are liable to include employees in Israel.

The move comes after the company reported its financial reports for the fourth quarter of 2008. Until now, the company had only suspended recruitment of new employees.

Although SAP posted €3.5 billion revenue for the fourth quarter, 8% more than for the corresponding quarter of 2007, and above the analysts' consensus, software sales were down 7%.

SAP co-CEO Leo Apotheker said, "The cost containment measures will allow us to adapt to the tough market conditions and ensure the long term competitiveness of the company. We expect 2009 to be a year of limited visibility, making it increasingly difficult to project sales in this environment."

SAP Labs Israel managing director Mickey Steiner said in response, "The repercussions of the layoffs on SAP Labs Israel are not yet known."

SAP did not state which activities are where it will make the cuts, but such measures are usually broad-based, suggesting that the jobs of several dozen of SAP's 900 Israeli employees are at risk.

SAP general manager Gilad Gans said that the company was actually seeking sales staff following what he called a "successful quarter" and "expectations of a good first quarter."

Published by Globes [online], Israel business news - www.globes-online.com - on January 28, 2009

© Copyright of Globes Publisher Itonut (1983) Ltd. 2009

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