Thread regarding SAP layoffs

Not only does this guy says he supposedly works in manufacturing and then goes on to say he doesn't use SAP, which I guess is meant to validate he is an independent voice. But then proceeds to attempt to explain that SAP is a "producer" that makes, sells., etc..... you know kinda like exactly what Apple does, but tells that the comparison to them is ridiculous, really???

I'd say well done chap, for somebody who is not in the industry, doesn't use SAP but professes to know our complete product portfolio, our process/supply chain and what size our customer base is- is great work, or maybe we got a troller here, or one of CK's assistants.

To the person who posted that comparison to Microsoft and Apple is ridiculous and says they work in manufacturing.

Obvious question is, why is someone who works in manufacturing be posting on a site exclusive to SAP layoffs???

@2czz+1qCZaiZd I think it happens every AHC… definitely the January one.

It’s interesting that the entire executive board will be atrending the all-hands meeting on the 24th.

Don't forget that the 110,000 employees does not include all of the Cusers placed all over the company. Globally there are '000's of them.

We also have teams who completely rely on outside consulting companies to run much of their projects. These consulting companies just jump continuously from one project to the other just like they are paid staff of SAP.

These numbers significantly increase the "real" HC numbers for SAP and distort whatever metrics are used to evaluate our workforce numbers.

Benchmark for RPE is 3-5X of employee salary, including all statutory costs and all fully loaded benefits.

Shareholders will ultimately decide what is a good or bad RPE.

It's not so much a matter of what metric is used to determine if the  workforce is properly sized; you only need to use your eyes and business sense to see what goes on around  here to make a judgement.

We have some teams who are expected to put in whatever effort is required to accomplish the job, like late hours or weekend work.  Then we have others who are managed by individuals who have no clue about the function they are managing which results in  overstaffing and  endless projects that serve no purpose other than to justify their existence. To then having  teams in our largest board area  whose main function is to be concerned about who the entertainment will be at the annual  extravaganza in Hawaii..   In the case of the  latter two instances,  you have tens of thousands of employees.

For those who were here when Leo was CEO, perhaps you remember the  exercise the company was pushing out to everyone which was called something like the  "30 second elevator pitch"  The idea was that if you got on an elevator with one of the Board Members and they asked you what you did, you had to be able to  present your job scope in 30 seconds.  Teams all over the company  spent a good deal of time  working on some type of theoretical response. If nothing else it was a humorous activity.   If we ran the exercise today,  many of our people would  require a consultant to ride along with them in the elevator in order to come up with something that, if not true,  at least sounded good.

No question our  post acquisition strategy has been a failure.   But the truth is we are very much an overstaffed company,  which in large part was built on the premise of the "haves and have nots"  with very little or no justification as to why team size exploded for some and for others who legitimately needed help  did not get it.  In my opinion . we got here not only because of our acquisition on boarding process but also due to a long line of  Executive Board members who have no  real understanding as to what their organizations do and how much headcount is really required to accomplish the function and also because we have had very weak CEO's and a Chairman who had no interest in such details, with the end result being our organizations  have been able to ramp up as they so wish.   Let's see what Renjen now does.

What if there are no layoffs in 2024. All this fear mongering will collapse by itself after 24th Jan.

Clearly, this person is L3 / L4 .

Very few know that Revenue / Employee is a KPI that's being looked into so aggressively right now . It's not that this KPI appeared in industry in recent times, but at SAP, it's been looked into more closely recently. One reason is because this is how consulting company, that is advising SAP on margin improvements, is looking into things .

Q is : What is the magic number here ?

Is anyone willing to talk about the elephant in the room. Why so many customers require RFPs when moving to S4?

If this continues, sales costs will further increase.

Track the HC growth versus revenue from early 2000s to 2020s annual reports. Draw your own conclusions.

Many of us had to deal with situations where individuals from the acquisitions were put in leadership/management positions over SAP teams - and in all cases where this occurred that I am aware of, it did not go very well.

Aside from the obvious resentment that employees who worked hard for SAP were passed over, the even more ludicrous fact is that it was these people from the acquisitions who made decisions as to who would be laid off and who would keep their job.

All trust was lost when these managers kept their people from the acquisition and laid off SAP employees and our so called SAP Leadership stood by and did nothing about it. It was hard for us to believe.

We totally failed in the integration of the acquisitions and now have placed 110,000 employees at risk for a life changing event like getting laid off. It should have never come to this.

You would only compare SAP to IBM, Salesforce and Oracle if you want to use mediocre companies in order to get a favorable comparison. These are not best in class companies.

The point is well made as it relates to the mismanagement of all of our acquisitions and how many people have been brought into the company. Any other corporation would have maximized its investment and looked for areas where there was duplication or opportunity for consolidation - SAP did neither and all of us will pay the price when it comes time to reduce HC.

Oracle 50 billion revenue and 164k employees.

I partially agree and disagree on the points which were made in the original post...My analysis below:

1. Could we compare SAP with Apple, MS and Google - No because these companies have both B2B and B2C product offerings. Valuations of B2C businesses are relatively higher because they have a larger pool of customers to target like the whole world. Most of their hardware manufacturing is outsourced to cheaper markets like China, Vietnam & Others. Those employees are not even counted as their own employees. Bring these manufacturing to US, EU and then see their revenue per employee drop or prices of hardware increase to compensate for higher manufacturing costs. Cannot compare apples and oranges.

2. Compare SAP with Oracle, Salesforce, Service Now, Workday etc as the segmentation of business, customers and service offering is nearly the same to get a better understanding of the revenue per employee and other important metrics. Relatively US companies have higher valuation and market cap because of the amount of stock which gets traded in US stock markets.

3. Did SAP managed its past acquisitions properly and did they rationale the workforce to reduce effort duplication - Big No...Still Successfactors and Concur is not fully integrated even after more than 10 years, looked like cr-p from 1990s, feature set is weak and highly unusable. The only acquisition and integration which happened very fast was of Signavio.

4. Could SAP generate good profits with the current structures - Not easy because it's a low margin business where contract renewals happen every 1-2 years. They cannot tie the customers like On-Prem business. Most of the engagement model is self service and frictionless. They need to compete with mature players whose business model are cloud native. Hard decisions would need to be taken if they go all in on cloud and disregard on-prem completely for the older/ legacy customers who are not tech natives.

5. How would Renjen steer the SAP ship - At Deloitte, he managed to uplift the valuation by more than 10x times. He has come from a humble background and have grown from bottom up the hard way. Never worked for any German company before so expect cultural and ways of working differences. It would depend how he and the board (full of late 30-early 40 executives who have only worked at SAP) would gel and align, expect friction. He will be answerable to the board and shareholders (Mostly institutional, not retail) and not too much to the employees directly. Expect him to take hard decisions because his perspective is business driven and outward in rather than inside out. Expect a bumpy side but fingers crossed.

people can bury their heads in the sand, but these bloated HC numbers will be addressed and resolved.

Do IBM and Salesforce and Oracle and AWS check for radiation shields ?

Another vital metric in 2024

@ynp+1qCZaiZd Could not disagree more. To your point of negating the comparison to MS and A, all I can say is for anyone who is really familiar with the manufacturing industry would know that it takes significantly  more resources/ employees to "produce" products like phones, tablets,etc. than what SW requires.

These companies must have people in:  product design, MRP, assembly, logistics, sales and distribution, etc... and of of this on top of the G&A which SAP has.   The fact that they can produce all of these hardgoods with only slightly more  HC than SAP has tells how efficient these companies are and how out of balance SAP is..

 The fact is that what SAP does ( and does it very well)  is developing SW and then images it onto  half million CD's, all with "a keystroke" ( nd now we don't even do this anymore) and for this it takes no where near the HC MS and A have in place. These companies are recognized for the efficiencies they are able to drive.

Absolute fact is that we have done a terrible job at managing our acquisition process and the number of employees who have entered the company

Compare SAP to IBM, Salesforce, Oracle and not to Apple, MS, Alphabet.

This comparison to Microsoft and Apple is ridiculous. I work in manufacturing, we don't use SAP. But the factory is filled with $hundreds of thousands of Microsoft and Apple products. A and MS make and sell all sorts of things.

SAP is a large niche producer that makes/sells/runs Business Software product for businesses with multiple tools. They have a smaller customer base. I'd say good job SAP.