Thread regarding SAP layoffs

I think a safe bet that global markets will now turn downward with recent events and tariff wars. Most likely this will lead to a deep recession globally.

Everyone should be holding back on any major spending and doing all they can for the impending economic downturn.

Layoffs will no doubt be coming in larger numbers than originally thought - time is now to protect yourself as best you can.

I have found in my time with SAP that one of the major problems is that there are far too many people in positions they have no qualifications for. Good for SAP that allows individuals to jump from one Board Area to another and most likely do it with a promotion, but is this really good for the company?

I think this breeds resentment, favoritism and mismanagement. All you need to do is to look at our Executive Board and see who among this group has anywhere near the qualifications to be at the helm of a fortune 100, $36 Billion corporation.

Corporations are just not about products but they are also about people and here you must have the people qualified up and down the company to lead it.

Do we really have this?

I was in 2024 lay off.. My experience is that SAP is work life balance and the salary ROI is good but it's not the right place to grow your career. I had extremely hard time looking for jobs with equivalant salary after leaving SAP. I am T4 but only did routin job without any leadership development, that I didn't feel I actually grow during my tenure at SAP.

I do think SAP is pivoting away from the ERP business - this much is clear ( and surely someone else will quickly fill the void we leave behind and make a tidy profit - does anybody forget Tomorrow Now or Safe Passage ? these were all designed to basically do the same thing but in reverse and move companies away from their current provider and over to SAP.... now somebody else will do the same to SAP.

The strategy still escapes me. I guess I just haven't been able to figure out what our Board apparently has, which is to give up on the ERP business where we were worldwide leader and instead jump into the "Cloud" pool where we can compete on an annual basis against companies who are determined to drive any profitable margin into nonexistent territory.

@10j+1jmmm24cb AI (specifically generative) is just a bubble, it has very little use cases that are actually profitable (who wants a 15 minute conversation with a rubbish chat bot when you could just look at the same report each week), but at the moment in make line go up (stock price) until it pops. This is the same as block chain, the same as the last AI bubble, all of which the big legacy tech companies (IBM, Oracle & SAP) have been furiously chasing to try and find some growth in already saturated markets. It will go pop and then whatever is the next trendy thing they think they can bullsh-t non tech CEO's into buying will be the thing. There is no pivot to happen.

FYI to everyone, I was laid off 1 year ago in the 2024 reorganization. I had been with SAP for 22 years and during that time I saw the company expand 3x from what it was when i joined. It was a fantastic place to work during all those years. During my tenure I was able to advance into several different teams and also escalated my role into higher and higher management level positions which then also drove my compensation up.

I was 58 years old when I was let go and my comp was in the range of $130K per year. No issues with my exit package and can say that SAP was fair with me. But that all runs out at some point and I am now turning 60 and haven't been able to find an opportunity which is equal to the level I had at SAP and I am sure that my age is also a detriment as well to companies who otherwise might have had an interest.

My advice to everyone, is for sure I didn't see my layoff coming. I was on excellent terms with my L1 manager and thought for sure I would retire from SAP. Things can change in an instant, please don't think anything is secure in today's environment.

Just know that the best time to look for a job is when you already have one and so keep your eyes open at all times to see where else you can use your skills, because some day you just might have to.

I think the question SAP will be faced with is "how" it pivots from being a world leader in ERP platforms for the last 5 decades to a company that now competes in Cloud SW and AI.

Cloud profit is a fraction of what the ERP and Maintenance business spun off year after year for SAP.  The competition is overloaded with "Mom and Pop" companies who operate on  overhead that dwarfs SAP.  For SAP to put a stake in the ground in the Cloud Biz, it will have to shed a lot of expenses and overhead.   This means barebone presence in high cost countries and consolidation for other countries in order to minimize redundancy.

Meanwhile SAP says it wants to focus on AI - But what does that really mean?    Do we want to be a developer of AI solutions OR  will we be a company which deploys AI functions via AI powered BI tools that can help businesses collect, analyze and visualize data  more efficiently and effectively OR will be be a SAAS company for AI software   where we deliver and licensing the applications via a subscription to prospective customers?   AI is an entirely new enterprise and just saying that we "want to focus" on it, leaves a lot of empty space.

At the same time, the Sales  functions will likely dramatically change as we pivot out of our current biz.  No longer will we require six figure sales personnel who go f2f with prospects but rather our sales model will shift to a virtual one and perhaps outsource to a third party platform that can combine Lead Generation support directly into  Sales support.

No matter where our new journey takes us what is absolutely clear is that SAP is leaving a legacy business behind and embarking on something new and we should be expecting that major changes in how our headcount is organized and located around the globe, it will have to be changed by both  reductions and outsourcing in order for  SAP to be a profitable enterprise in the new ventures. 

Absolutely true.

SAP agenda is clear whatever the board says. In the next 3 years, SAP is going to :

1. Reduce cost of sales. It means removing most of the sales "support" roles or replacing people with young employees paid 50~60k$ a year. Example in 2025 : Enterprise CSP role that was just entirely removed, worldwide.
2. Shrink & Move R&D jobs to what board calls "low cost locations" : India, Brazil, Bulgaria, Romania mainly.

SAP will increase its revenue and keep its size to 90~100k employees, with ~1/3 in India Labs. That's the target.

If you are young enough (< 50~53 years old), I recommend you to look for another job that will give you some better experience and skills. SAP will only teach you "SAP" skills which is ok but represents ~5% of what is being requested by the market as of today. And this number keeps decreasing.

If you are older than that, my advise is to seat tight and try to stay and find internal jobs until you are close to retirement. Unfortunately, our societies still don't promote experienced people. It's a mistake but that's a fact.

I personally took the first option 15 months ago and left SAP. It was difficult to find a job because no body cared about my SAP skills "at all" or people thought I was expert at SAP ERP which I wasn't (I used to work on CX products). Thanks to luck only, I eventually found a job paid 15% less than SAP, but now I realize it was a really one of the best decision I took.

In the recent broadcast CK said there will be no P25. Was this a lie?

@ry+1jmmm24cb Yep, absolute destruction is coming for the workforce. Get ready for 2025, spreadsheets out and deleting IXXXXXXXX numbers fast!

I do know that P25 is a thing and it is confirmed sorry.. but things are going to get rough for all of us either way get your household in order because sudden destruction is coming.

Yes start applying for new jobs. My manager to this date still does not know whether we will be impacted arriving 1st of April 2025. Layoff announcements will probably be announced sometime between March and April.

Outside of Germany, I don't see the VERP coming back, at least not like the program they offered last year. You always want to be at the beginning of the line- never at the end. You have no leverage when you are last out, you take what they offer, if anything.

And like what was said on another post, if the economy slides backwards, there are several reasons why SAP doesn't ( and won't have to) offer a good package to incentivize people to leave, they will just let them go on standard compensation.

I took the VERP and actually it was a pretty decent package and overall I am glad that I left ( after 20 years). The company is changing in many ways and I think we all know it.

The overall environment is not good, we see Public Sector in some geographies are cutting people like we never have seen before - just taking a chainsaw to them. This will only promote similar behavior from the private sector.

2025 most likely will not be a good year for SAP as far as employment goes, or for that matter anybody who works for a living and depends on a job for survival.

@b9+1jmmm24cb - one convoluted “positive” they can take to the board in May: by extending layoffs into 2025 they can kick to the curb - with straight severance rather than sweetened VERP payout- those who turned down the 1Q2024 VERP offering. That could be a significant restructuring cost avoidance.

@b7+1jmmm24cb

Thanks - OK then it looks instead of end of March we now will finalize the cuts 4 weeks later, end of April.

That's not good news as we are only about 8 weeks away from this... and especially as the Stock Market is dropping big time this week and in just 3 days, SAP is down almost 4%, where the cause of concern in the market has nothing specific to SAP but more global like unknown impacts of worldwide tariff wars and inflation spiking.

Could not be a worse time for the company to undergo a significant drop in stock price, especially as the Annual General Shareholder meeting is also coming up May 13, just 2 weeks after the alleged end date for the "transformation." and surely CK wants to protect his self by showing something positive to the shareholders, like the famous "expense reduction" initiative.

I remember CK one year ago when the 10K HC reductions were announced telling that we would be investing in "reskilling" impacted employees into new functions.

What happened? Who and how many were "reskilled"? To what teams did they go? Do we not get some information about all of this? Where is the "trust" factor?

I guess I must have been asleep for the last year, when all of this "reskilling" was taking place - because, I am sure if they said it, then they have done it !!! Otherwise, what can we believe anymore??

CK said restructuring will continue through 2025 Q2/April. If you read the financials there is approx 681M EU ($712M) remaining in the restructuring program. Total program, 3.144B EU. So 21.6% program funds have not been yet spent.

SAP 2024 quarterly statements from SAP website, section L, RESTRUCTURING, Page 23.
https://www.sap.com/investors/en/reports.html?sort=latest_desc&tab=reports&pdf-asset=6a2933d8-f07e-0010-bca6-c68f7e60039b&page=23

Why are they hiring all these sales reps.

Yes, that is correct that the "reorganization" would continue to 2025.

But my recollection from the SAP official announcement last year was that the headcount reductions would be completed by end of Q1 2025.

I am pretty sure this what was announced - Does anybody else recall this statement regarding the end date?

This being the case, unless the end date is pushed back further, then we will have some very difficult weeks ahead to the end of Q1.

Any observations of 2025 layoffs happening in NA and Europe?

So true! They have a number in mind and will follow the McKinsey playbook and continue layoffs until it no longer gooses the stock price. No job is “safe”.