I think everyone expects some layoffs this year

One school of thought is that SAP will have minor layoffs in Q3, especially if the performance results do not look good.

The hope would be that there is some improvement in Q3 - good enough to buy some time to turn profitable by Q4. If it turns out that we have not improved profit and margin good enough in Q3, then expect a bigger cut in q4 and allow SAP to close out the year in a significant cost cutting mode and a bigger round of layoffs. I would think that before we go to next year when it seems very likely we will have some level of a global recession that hopefully SAP has shed as much cost and expense as can be done and be in better shape to deal with what will come in 2023.

The problem will come if SAP continues to struggle with getting enough compliance and ability to mandate cost reduction to achieve a turn around on profits. But that depends much more on the employees than it does with the leadership - the culture of entitlement must change. If not then continued lack of Profit combined with high inflation and impending recession will surely make for a bloodbath here.

Anyway we should have the new CFO by Q4 or Q1/23 and I would think as part of the vetting hiring process they will be asked for detailed ideas on how to improve margin and cut costs and the new CFO will then have the chance to implement their ideas as type of new sheriff in town. Here's hoping to whoever it is, they can do it.

An on point post from @1mkn+1i0P9a0A.

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This may have been the best exchange I’ve read on this site. More actionable insight and transparency than the last 2 years of internal surveys.

Agreed with the post that Q3 must show Profitability is headed in a positive direction, if not then Q4 will be significant reconciliation in order to show investors that SAP understands its problems around why is it is so difficult to turn a profit and is serious about fixing these issues.

But I am sorry to say it this way, but we have the most inexperienced Board Members imaginable and what capability this group has around identifying problem areas that are leaking profits and correcting them in a "mandatory" and seamless way is, well, nonexistent.

The average age of our Board Members is around 40 years of age - I am reminded of a group of recent college graduates when I look to these. Neither Christian or Thomas has even worked anywhere else other than SAP in their overall 20 year working history. Very nice group of guys but hardly the business people who have exceptional business acumen, critical thinking and influence/stature to drive results. I am not hopeful that we will get a CFO either who will excel in these areas either.

I am sorry but for a company with a Market Cap of 115B and over 100 K employees, this cannot be the central figures who will lead us out of the challenges we have and for this reason I expect some very difficult times ahead in 2023 for ourselves and who of us will remain this time next year with SAP.

Intriguing if not foreboding that Sept. 9 N. America all-hands with CK is on a Friday afternoon (after US Labor Day) from 3:30 -4:30 US EST. Calls at that time rarely yield good news for employees during trying times…

Christian Klein is basically a caretaker/babysitter CEO. He has no new ideas or innovative strategy for SAP. Similarly, his lieutenants Thomas Saueressig, Juergen, and others on the Board are truly bereft of ideas. It's all reactive, not proactive, leadership. As the German economy and European economy goes into recession this year, SAP will continue its slow downfall. However, once the Ukraine conflict resolves, and Russian economy reopens to the world, then SAP has a chance to improve, along with the German economy. For the time being, it's musical chairs for the board members and the employees.

Speaking from what used to be the Products and Innovation Board area we lacked in a big way defining, executing, and selling products that Customers will invest in.

The list is long of products: SAP Netweaver, Business Application Studio, Fiori, S4 HANA, Business Suite, SAP Business One, SAP Business By Design, SAP Leonardo, etc, etc.... Many of these are no longer around.

Think of the tremendous cost to develop all of these products to then retire them.

On top of this erratic product strategy, our focus for 50 years has been ERP platforms but then we advertise a complete shift to Cloud Products leaving ERP behind. While our Cloud products have all been bought by acquisition , but we still maintain huge development teams in WDF and all of the Labs locations.

We have confused our customers and then lack confidence that what they buy today will really be the product SAP supports tommorow or do they get another sales call to re-invest in something new that SAP is selling.

This is our problem.

Asking CFO for the profit is the wrong question. CFO would always reduce costs.
The main issues I percieve are product strategy and producticity

A lot of good points were made in this post.

As noted there are already some layoffs happening although nothing major at this point.

Agreed with author that if these don't succeed in getting better margin, then expect Q4 to be more significant.

Right on.