SAP to cut research centres in drive to lift margins

Credit: REUTERS/Ralph Orlowski

German business software group SAP plans to reduce the number of research centres while holding research development costs steady, an executive said on Tuesday.

LONDON, Nov 12 (Reuters) - German business software group SAP SAPG.DE plans to reduce the number of research centres while holding research development costs steady, an executive said on Tuesday.

The measures, announced at SAP's capital markets day, are aimed at helping Europe's most valuable technology firm fulfil its promise of expanding profit margins by 5 percentage points through 2023.

Luka Mucic, finance chief, said SAP will reduce the number of research centres to five from 25 now. The budget for research and development will remain steady at 14% of revenue, he said.

The company will also cut management costs and the number of its suppliers.

The capital markets day was the first major outing for new co-CEOs Jennifer Morgan and Christian Klein. The duo have taken over from long-time boss Bill McDermott, who is leaving to head up ServiceNow NOW.N

McDermott launched the efficiency drive to expand profit margins.

(Reporting by Ilona Wissenbach; Writing by Tom Sims)

((ilona.wissenbach@thomsonreuters.com; +49 69 7565 1274; Reuters Messaging: ilona.wissenbach.thomsonreuters.com@reuters.net www.twitter.com/REUTERS_DE www.reuters.de))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Reuters

Reuters, the news and media division of Thomson Reuters, is the world’s largest international multimedia news provider reaching more than one billion people every day. Reuters provides trusted business, financial, national, and international news to professionals via Thomson Reuters desktops, the world's media organizations, and directly to consumers at Reuters.com and via Reuters TV.

Learn More