Thread regarding SAP layoffs

Hey guys, just like last year's layoffs, do you think the folks in Hawaii/Winner's Circle will at least raise a glass on behalf of those about to get cut? The least they could do.

Like I said last year, SAP is the land of the "Haves and Have Nots"

@4byw+1qNUembq

Clown...

So... its February 1st in NA... anyone hear anything about VERP emails?

I want to clarify my comment below. Yes, the VERP is considered earned income for this year but SAP will pay your health benefits through the end of the year. The health exchange site only looks at your last 6 months of EARNED income which will be zero in December of 2024 so you should be eligible for a very low monthly premium in 2025. Good luck !!

If you keep your annual household income level at about 50K you can get an individual health plan with dental for about $200/month. Yes it has a “high” deductible but so does our plan with SAP. The key is to keep your EARNED income low to get these prices. Think about using your VERP $$ + investment returns in 401k and Roths. The only earned income from those 3 streams is the 401k so keep distributions to a minimum to get a lower premium on healthcare. Do your own personal math.

Is this for one person? What annual income level is this rate based on from ACA, and from which state's exchange?

"Decent medical plans on the exchange are $1500 / mo and up."

As someone who took the package in 2019 at age 59 in the US, I can attest that what you really have to consider is the cost of medical care for the next 5 years or so after COBRA runs out. Even with a nice subsidy from Obamacare aka, ACA, my premiums are still $1K a month for my wife and I and deductibles are ludicrous and eats a hefty portion of monthly expenses. Decent medical plans on the exchange are $1500 / mo and up. Expanded ACA premiums for higher earners end after 2025 (unless extended) so unless your joint income (for 2) is around 70K or less, you won’t qualify for any subsidy after 2025. Something to consider if you are not planning on finding anything else after separation.

I think it’s simple math. Layoffs are not approved to be done at all in Germany. That is why there the verp age will be very low. Most verps will be forecasted from this market unit. Lay offs can happen in every other MU

@3lky+1qNUembq Thanks for the insights. February 15th is interesting... I think a timeline outlined here (or another post? I can't keep track) stated February 1st, giving folks until March 15th to decide (let's face it... to try to figure out if they could afford it...) So... maybe they are thinking of giving people less time (and giving themselves more time) or they will extend the end of employment date. Honestly, I think what sounds most likely is 62, February 15th, and you're out by March 31st if you take it. Fewer people to pay, more time for themselves, less time for the employee, and this part is all done by the end of Q1. Either way, its the bean counters counting beans and the employees --- and their lives and their families and their futures --- are nothing but beans.

Keep in mind. The VERP age is region specific. And the Germany age will be lower

The rumor mill is certainly in full swing. Last I heard is that the VERP letter is coming out on Feb 15. I have heard both rumors about 59 and 62 being the age. As we know, it was 59 last time, and I know many people who qualified at that time but DID NOT take it because it was too far away from retirement....the main point being that they had to cover their own medical for up to 6 years (one colleague shared that his out of pocket would be $25K/year for he and his wife). Medical is the ONE THING that will keep people from taking the VERP. Remember: They WANT to get rid of T-4 and above....those folks are old and expensive (no offense intended...I'm part of of "old and expensive"). As a hiring manager, I had a T-4 vacancy last year, and they made me downgrade it to a T-2!!!! This is part of a larger effort to reduce overall payroll.

Don’t assume you will still have a job if they offer you a VERP package and you don’t take it. You could still be let go with a much smaller severance package after April 1st. This is much bigger than transitioning to AI and re-skilling. Bottom line, they are cutting costs whether you take VERP or not.

To everyone who has posted replies to this… Thank you. The most useful info posted so far. Thanks!

In addition to the points already made, you have to also think about a potential life changing event that will require money.

My husband and I had always planned that we would leave the northern part of the US and move someplace down south. We felt that we both had worked all these years and wanted to get to someplace and into something nice to enjoy in our retirement. We also wanted to be able to take maybe 1 leisurely trip a year, last year we went thru southern Europe for 3 weeks.

I can tell that there is a lot of costs involved with enjoying your retirement and in making a move to another locale and whether you pay for it out of your portfolio or finance what you can, it will require a sums of money that maybe you didn't factor into it when you plan on taking a VERP and all of this money has to be earned "after taxes" which is a big bite out of your retirement income.

Whatever decision everybody makes, think about plans that maybe you have been holding onto until you were in retirement and if you don't have a significant steady stream of guaranteed income ( SS won't do it all) then you better really think hard before taking the VERP. If what it takes to make you and your spouse happy in your retirement years is a life changing event or just doing things to enjoy your retirement, please do not underestimate what these things will cost, which some of these costs will likely be for the rest of your retirement. You don't want to make a move you have been waiting for and then be unhappy you did. Think carefully about what's ahead and what it will cost before opting in or out of the VERP.

Good luck to all.

Could be wrong on the date and it might have been late Jan or early Feb when I got the first notice? ( I am not 100% sure) The outside site to begin reviewing your personal documents wasn't available for maybe a week later.

There was maybe 6 weeks where everyone had time to review all of the documents, meet with their financial advisors, ..etc before being required to make a decision. Once you either opted in or out, there was no changing your mind. You had to turn in your stuff and be out no later than May.

Overall I thought the amount of time they gave everyone was pretty adequate to do what they needed to review all the financial and personal issues needed to make a decision like this.

Although on a separate note, one of the mandates was that you could not return back to work for SAP in any capacity and in one of the earlier VERP ( before 2019) one of our SVP's ( I won't mention names) who was in a very associated role to this, took the VERP and then began showing up as a consultant about 6 months later, which a lot of people saw this and were pretty disgusted about the favoritism some folks got.

Copy and pasted from the 2019 Voluntary Early Retirement Program for U.S. Employees
Decision Guide that was part of the email I received on 2/1/2019 from SAP America Total Rewards.

Important Dates to Remember:

February 1, 2019 to March 18, 2019: The VERP election window period is open.

February 11, 2019: VERP election website opens.

March 18, 2019 at 5:00 p.m. ET: The deadline to respond to the program offer, including signing, and returning the Agreement. After this date, the last election recorded through the election website at www.SAPVERP.com will be considered final.

April 1, 2019: Last active day of employment

April 15, 2019: Last regular salary paycheck for program participants, and official separation and retirement date. No later than 45 days following the end of the VERP
election window (March 18,2019) provided you have complied with all program requirements. You will receive your VERP payout, including your lump-sum
severance and health benefit supplement payments less taxes
and deductions.

May 1, 2019: COBRA coverage begins for participants who choose to continue their current medical, dental and vision coverage.

@2ude+1qNUembq
Just curious... 2nd week of January? Or February? In 2019 McDermott and Team announced the results on January 29th, along with the news of the restructuring program.... so you received a VERP offer before the announcement?

Deciding on whether to take the package or not is only one decision. The bigger question is what will you do next? It's not about how large you 401 is or your savings account, but rather on how much guaranteed income you will be able to bank on year after year for the rest of your life.

you can pretty much guarantee that what ever payout you get from SAP will be worth very little in terms of lasting thru your retirement. Just only considering the cost
for Medicare and a supplement plan for you and your spouse, you will be paying about 15K + a year ( which doesn't cover Dental, eye. etc...) Means you have to gross ( depending you on your bracket) maybe 20K+.

When I took the package in 2019, I had 20 plus years with SAP and still I looked at buying some amount of guaranteed cash income ( like CD's, annuity...) and glad I did.

Even if you get on SS at 65 you are still shortchanging yourself, you should try and wait till you are 70 to begin collecting.

think carefully before you just go for the package if you are younger than 65, it's as much about savings as it is about guaranteed income - you need both, if you don't have both, you should think about staying at SAP

Why would anyone assume that if you qualify and take the offer…you would actually retire? Almost all I know who took the 2019 offer were back employed within a couple of months, and most are still at it!

you have to keep in mind that the full retirement age in US and Canada is 66 and 65 respectively.

if you retire earlier like 62 and want to collect SS, you will take a 30% cut for the rest of your life.

Last time I believe SAP also required 10 years of continuous service.

Obviously the earlier the age, the more it will cost SAP. And most likely those in their late 50's early 60's are making the most in salary on their teams. Depends on how generous SAP wants to be. Since they have already disclosed they plan some amount of layoffs, they could just as easily raise the retirement age and go for layoffs on the more expensive people ( and really minimize their cash outlay.

In any case the official package has to be coming out any day for those who are eligible. Last time in 2019 I got my notification around the 2nd week of January and last day was in May, so those folks who make it, should be notified very shortly.

@2svz+1qNUembq -- I was offered the package in 2019. I still have the pdf version of the offer. It was for age 59 in the calendar year. "Early" is subjective. For me, 59 was way too early. I still had lots of earning power and years to go before SS and medicare. Had I been 62, it would have been a different story -- that would be early but not too early. It would have better bridged the gap for SS and medicare.

I thought is was 55 last time in NA? 59 and 62 don't really seem that early.

62 seems pretty high. In the past 2 it was “must be 59 or older in this calendar year”. If this verp is so limited, just means more lay offs to get to the 8800 goal

Age will vary country by country. I was in the last VERP of 2019. I don't recall SAP informing what the age by country was for the VERP.

All correspondence came from the outside consulting company SAP hired to facilitate this process. I tend to think it was 62 for NA employees.

in the past it was 59. There is a rumor that they changed it this round (assuming there is a "this round") to 62. This may indicate they will offer the "higher" end VERP package (more weeks for each year of service, medical reimbursement/benefits thru age 65. It also may indicate they're just being cheap. And, as noted, it could be a rumor, so it could be 59. There is no "law" in the US (except that which governs your eligibility for medicare) unlike in Germany. The bottomline is that it doesn't help to worry about it... just sit around and wait for these clowns to get around to pulling the trigger. They've done what they consider their jobs --- say something to satisfy shareholders. The employees, always an afterthought, can wait and worry. I say, don't worry... don't let them win.

https://www.thelayoff.com/t/1qJSvU5l discussion is already here.