SAP will cut staff as full-year net income dips 2 percent

SAP will cut staff as full-year net income dips 2 percent

SAP's net income dipped in 2008 even as revenue grew. The company will lay off staff as a cost-cutting measure

SAP intends to reduce its global workforce to 48,500 staff by the end of this year, it said Wednesday. The company currently has more than 51,800 employees worldwide, according to its Web site.

The staff cuts will result in annual cost savings of EUR300 million to EUR350 million beginning in 2010, SAP said.

SAP's net income for the full year 2008 dropped 2 percent year on year, to EUR1.89 billion, even as total revenue for the year grew 13 percent to EUR11.6 billion (US$16.3 billion as of Dec. 31, the last day of the period reported).

Despite the dip in full-year net income, SAP posted strong figures for the fourth quarter: Revenue from software and software-related services rose 8 percent year on year to EUR2.67 billion, while total revenue for the quarter was EUR3.5 billion, also up 8 percent. Net income for the quarter rose 13 percent to EUR850 million.

For the full year, software revenue totalled EUR3.61 billion according to U.S. GAAP (generally accepted accounting principles), representing an increase of 6 percent over the previous year, SAP said.

The results include gains from January 21 last year from SAP's acquisition of French business intelligence software vendor Business Objects.

SAP said it expects the operating environment to continue to be challenging during the current year. It warned that a comparison between 2009 and 2008 may be difficult as the company posted strong results in the first half of 2008, before the economic crisis disrupted global markets.

The company said it would not provide a specific outlook for revenue from software and software-related services for 2009 because of the continued uncertainty surrounding the economic and business environment.

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