A man cycles past the SAP logo at its offices in the CityWest complex, Dublin
A man cycles past the SAP logo at its offices in the CityWest complex, Dublin Reuters

Enterprise resource planning software solutions provider SAP would cut thousands of jobs as software programmes become cloud-based, reducing onsite staff requirement.

Reuters citing a source said the German company is planning to cut between 1,500 and 2,500 jobs. The company employs more than 66,500 people in more than 130 countries across the globe.

The company on 14 May indicated that there would be target job cuts in the company, but it declined to say the exact number of redundancies.

"The number is not yet definite and there are still checks being made as to whether positions overlap or are unnecessary," the person with knowledge of the matter told Reuters.

The source added that the cuts would affect all regions and areas.

Nevertheless, SAP plans to create about 3,000 new jobs in 2014, leading to a net increase in the number of staff, according to the source.

A company spokesman told the Wall Street Journal earlier that the goal of the layoffs isn't to cut overall head count but to realign the company's resources with its new strategy.

More and more companies are adopting cloud computing, which reduces costs significantly. The companies are resorting to remote data centres provided by technology companies instead of running their own servers.

With more than 253,500 customers in 188 countries, SAP is also making its software solutions cloud based. The company is on a mission to deliver all its applications in the cloud.

The company earlier said its existing and new customers can now deploy analytics solutions in SAP HANA Enterprise Cloud, a cloud-based service that provides customers a deployment option to gain value quickly from SAP HANA.

SAP Cloud powered by SAP HANA provides the innovation and agility that businesses need to adapt their processes to capitalise on ever-changing market dynamics on a single, integrated platform, according to the company.