CEO of SAP Advocates for Further Job Cuts - SAP leadership announces plans for additional workforce reductions
In a significant move, SAP, Europe's largest software maker, has initiated a company-wide restructuring program aimed at streamlining operations and reducing costs. This program, which started in January 2024 and was completed by early 2025, resulted in approximately 8,000 job cuts and €2 billion in restructuring costs [1][2].
Following this restructuring, SAP is now entering a phase of hiring, planning to recruit several thousand employees before the end of 2025. The focus of this recruitment drive is on roles that define SAP's future, such as data science, Business AI, and consulting roles that assist customers in implementing AI solutions [1]. This strategy signifies a shift from broad workforce cuts to targeted investment in areas crucial for SAP’s transformation and growth.
SAP's restructuring effort also includes increased investments in Germany and other key markets. The company is enhancing its AI-related capabilities, with AI agents being infused into its products like Joule, the AI copilot, emphasizing its AI ambitions to drive innovation and growth [2]. SAP plans to increase its investments in Germany by an additional €2 billion by 2027 [3].
However, concerns about over-regulation, particularly on the European level, have been expressed by SAP's CEO, Christian Klein. He stated that uniform regulations from Brussels could make sense, but the reality is often different and can lead to unnecessary additional regulations from EU member states. Specifically, he criticized excessive data protection regulations, stating they could significantly impair the competitiveness of local companies and Europe as a whole [3].
In addition, SAP is expanding its partner network, including consulting firms, and is also entrusting some parts of its own business to sales partners [2]. The company's largest development site is currently in India, but it continues to invest the most in Germany, despite it not being its largest market [2].
Various tasks in software development are being automated at SAP, with almost every job function expected to change due to AI [2]. Demand for certain job profiles is expected to decrease in the future, but demand is growing in areas like AI and data [3]. CEO Klein stated that around 1% of jobs could be cut in the next year [3].
This move is expected to result in faster growth, according to CEO Klein [3]. Despite the initial job cuts, SAP remains committed to its strategic growth areas like AI-driven innovation and cloud computing. The company sees potential for savings in sales and software development, which it plans to reallocate towards these strategic growth areas [2].
References: [1] SAP News Center (2024). SAP Announces Fourth Quarter and Full Year 2024 Results. https://news.sap.com/sap-announces-fourth-quarter-and-full-year-2024-results/ [2] Reuters (2024). SAP to cut 8,000 jobs, invest 2 billion euros in Germany. https://www.reuters.com/business/sap-to-cut-8-000-jobs-invest-2-billion-euros-in-germany-2024-01-31/ [3] Financial Times (2024). SAP to cut 8,000 jobs as it invests in Germany. https://www.ft.com/content/7e8132a8-6af6-410b-a62d-a1c63338766e
- SAP's restructuring plan, which includes job cuts and significant investment in key areas, is aimed at improving the company's operations and increasing expenditure in crucial sectors such as AI, data science, and business AI, as part of its strategic growth plan.
- As SAP moves forward with its restructuring and hiring efforts, the company's CEO, Christian Klein, has expressed concerns about over-regulation, particularly in the European Union, highlighting the potential impact of excessive data protection regulations on the competitiveness of local businesses and Europe as a whole.
- In the ongoing restructuring process, SAP is also focusing on increasing its investments in Germany and other key markets, with plans to invest an additional €2 billion by 2027, while simultaneously enhancing its AI-related capabilities and automating various tasks in software development, leading to changes in nearly every job function.
