Thread regarding SAP layoffs

@cn if the redundacy @T4 are for overhead, e.g. HR, compliance etc. I will fully agree...

@1c4 but can those tools process the ocean of allegations (side deals, projects not getting paid for after hyperscalers “pinky shake” with customers and SAP to pay for delivery services, etc)?

The Law/Compliance dept will be one of the most impacted teams in SAP Finance org .

AI is already driving productivity of routine legal tasks, including document review, legal research, and contract analysis.

The past involvement of our Legal was much focused on Sales Org Support, especially when selling large ERP platforms - this will no longer be the case.

Cloud Business will be much more boilerplate as it relates to customer contracts. Think of what in former times was the back of a Purchase Order with miniscule print that nobody could read. and more importantly nobody would waste time attempting to modify. This will be the new format for our Cloud business - will be 100% transactional with no need for Law department involvement.

In the area of compliance audits these are now increasingly automated and utilize technology-driven processes that evaluate whether an organization is meeting regulatory, industry, or internal policy requirements, without relying heavily on manual checks. Using tools like artificial intelligence (AI), machine learning, and automated workflows, these audits continuously collect and verify evidence, monitor controls, and identify compliance gaps in real time.

Much of the Legal and Compliance functions will be wrapped up in AI technology and will be automated and eliminating much of the manual interface. And moreover this will likely be a functionality that SAP packages with its AI offering and thus has to use it internally to convince potential customers of its value.

@rq Legal and Compliance ? You have to be kidding! There are already numerous tools that can draft legal documents, evaluate new legislation and create compliance programs, and completely automated NDA negotiations. Any jobs left in legal and compliance, after adopting AI tools, will be off shored.

@pc There are no layoffs in Legal and Compliance, because they need everybody there in these times.

@kt

must have patience, for sure in areas you mention like: Compliance, Legal as well as all Finance Board Area we just need to wait just a little longer while the Dentist ( AKA "the Iceman), gets his full list together of who will be jetsoned off the range.

Since it is taking him this long, the list must be plentiful ! -:)

OpenAI incurred a loss of $3.1 billion USD over 3 months. Microsoft had a 27% stake in the company. $3.1 billion/0.27 = $11.48 billion USD loss for 3 months. That was for 3 months...actual losses. Multiply that by 4 quarters it is incurring about $45.92 billion USD annual loss (assuming constant loss per quarter). So these are my calculations.

https://www.cnbc.com/2025/10/29/microsoft-open-ai-investment-earnings.html#:~:text=In%20its%20fiscal%20first%2Dquarter,increasingly%20becoming%20competitors%20as%20well.

If OpenAI doesn't turn the ship around the hype might d1e off.

@kp Yet we continue seeing the same "jobs" being reposted 7 times already (mostly remote, and collecting your CV data to spam call you). The amount of jobs being created is actually net negative, so what on earth is the Trump administration doing besides baiting people with DEI politics to win the election?

Then you need to sit in an AI interview, and after 7 rounds meet with a real human to screen you and then be offered a low salary. What a disaster the job market is. + stagnant wages, houses you will never afford while renting a tiny flat, burnout or get replaced by an Indian, and mass offshoring of tech jobs.

@ef The thing is we didn't see any cut in overhead (also highly AI replacable) departments e.g.HR, Legal, Compliance, like our US competitors did.

For our colleagues in the US,   it was announced today  that October saw the largest number of layoffs ( +153,000) of this month in 22 years !    This should sound a 5 alarm bell for everyone,  as the US  economy does have  influence on the global economy and what happens in the US can affect other countries.   This has to be watched very closely as  a  continued slowdown of this magnitude could very well be the beginning  of a major recession.

The layoff news gets even worse when looking at YTD and YOY trends.    YTD total layoffs reached over 1.1 million through October,  this a 65% increase  when compared to YOY and the highest level since the peak of the pandemic in 2020.   In the technology sector  there were +33K cuts in October, which was six times the level of September.  Tech has led all industries for layoffs for 2025.

In a report from Challenger, Grey and Christmas,  companies cited the increased adoption of AI as the primary reasons for the reductions - let us not be misled about what AI is doing to our workforce.  It is changing it on a weekly/monthly basis.  Just look at the periodic  report updates as to how many companies are displacing positions with AI - the list gets longer and longer with each passing month.

It's a bad omen for things to come.

The headcount at Salesforce actually went up because they like every other company went all in on the AI craze and laid off the old-era staff. But look at the quality of AI work that is being produced, it's all sloppy. There's literally an industry term for this called "AI slop". The quality of AI work can never match that of a real human. Nobody wants to talk to an AI voice for customer service.

Klarna CEO regretted conducting mass layoffs because of this exact reason. It is overhyped because no one is going to pay for a reskinned, over-advanced version of Google. Even if you're not searching and querying the AI model, they've rebranded smarter automation with a hint of "AI" where the AI remembers and predicts your next actions. Predicting doesn't improve productivity when it has an unacceptable failure rate. That's why people don't want to buy AI solutions because of AI slop.

OpenAI is actually hemorrhaging tens of billions of dollars annually based on investor records from Microsoft. Yet, productivity around the world is still sinking due to burnout, a demoralized generation of workers, high cost of living, forced into traffic jams, and a lack of a future for most people.

I think in the case of past layoffs and obviously for the early retirement packages, SAP was looking to move out the older workers who were at the top of payscale.

However I would see the younger employees being the target of AI involvement. I say this because, for now, AI is taking over routine content creation, customer service, data mining, report generation...etc etc. These are mostly the functions AI is in place to do immediately.

But as time evolves and AI gets more enhanced, it will be the higher and more skilled set that will be in focus.

If you are younger than 50 years old, in all likelihood you will have to contend with the possibility of AI taking over some or all of your function.

@OP If by "AI" you mean needful doers, it's been happening.

@fm they will be replacing a majority of middle management in the future as do what they’re told by upper management.

• the Signavio HPOM experiment

All of you make some valid points. However, we have very good people in management, so I‘m sure they know about this and they know what to do about it.

Therefore I don‘t worry.

@c1 the HC of HRBP will surprise you, what are they doing?

I have to say that the use of the the word “headcount” has always bothered me, I’m reminded of farmers referring to their livestock. Now, when executives everywhere have shed their cloaks of coolness, fairness and pretending to give a sh-t; it actually makes sense. Headcount when referring to the need to trim the herd, and bodycount for those that survive the cull and continue to be sc--wed.

@ab

Roles in HR, Legal, etc. use little to no AI. But they’re safe during layoffs. ???

Best to double check your information.

In HR AI is fully involved in the recruitment process, handling resume screening, candidate sourcing, scheduling interviews, handling initial communications with candidates. AI is also involved in Performance Management - automating reviews and providing insight based on data towards achieving set benchmarks.....etc

In Legal, AI is already involved in scanning thousands of documents for discrepancies between edits ( and can do this in seconds). AI is also handling relevant research into case law and statutes much faster than manual methods, it is generating first drafts of legal documents and correspondence.....etc

The list goes on and on for what AI IS ALREADY DOING in HR, Legal... Perhaps you work in one of these areas and expressing wishful thinking. But you are very mistaken if you believe AI has no involvement in these areas today and just like all other functions, in just a few years AI's involvement will eclipse what we could even imagine today.

Unemployment among Gen Z workers in the tech sector has risen faster than the sector’s overall unemployment rate and that of young workers in general, according to Goldman Sachs.
https://finance.yahoo.com/news/goldman-sachs-economist-warns-gen-162037869.html

Goldman goes on to project that 300 million jobs will be lost or degraded due to AI. That is astonishing, even if just half of this is true, it will be catastrophic to the global workforce.
https://www.forbes.com/sites/jackkelly/2023/03/31/goldman-sachs-predicts-300-million-jobs-will-be-lost-or-degraded-by-artificial-intelligence/

Now neither myself, or for that matter does anyone else have a crystal ball to make an accurate projection as to what AI can, or will, do to jobs as we know them today. But one thing for sure is that none of us just 5 years ago would have thought that many, many companies are laying off tens of thousands in todays workforce. Therefore let us not be concerned as to what the impacts of AI can be in just another 5 years - change moves very fast.

AI has certain areas of great value where in aggregate it will perform better than the humans doing it now.

It is not General Intelligence and they won't get there from how they are approaching the problem now. There is a philosophical block.

All that said, AI is way over hyped on what is doing now and what it can do. And companies are firing way too many way too soon.

There will be reckoning in the market. Likely sooner than later.

No question that CK and DA are looking at our competitors and how they have used AI to replace positions within their own company. The list is long of those SW companies who already are utilizing AI to replace jobs, Such as; Microsoft, Salesforce, IBM, Amazon, Atlassian, IBM, Dropbox... and the list goes on and on.

Do we really think that our Board is not closely monitoring the displacement of positions in these companies and the cost benefit thereby gained and how this can be deployed in SAP?

Yes in some of these cases AI was used as an excuse to cut heads when really there were other reasons behind the layoffs, but for those who got axed, does it really matter.

The stock is in a free fall and the Board will have to demonstrate what is their strategy to get back on track - so far they haven't shown anything anybody is buying.

But they are watching what others are doing and for no other reason, they will not be left as the one who failed to take action and implement in all the same areas as our competitors have done.

AI and its impact is one of the reasons SAP stock ( along with other tech co, are decreasing). Today SAP stock is down +8.00/ per sh.

The investor market has several significant and unresolved questions as to what AI will do to the Software industry. as it exists today. And until it is clear that the SW industry can coexist and thrive with AI, there will be reluctance to by deep into SW companies.

@by is he related to Peter Principle?

A lot of the AI layoffs haven't been people being replaced directly by AI. They have been strategic choices to reduce headcount to invest in AI related areas, be that infrastructure or headcount. The companies doing this have decided that a worse performance, burn out of employees or entirely leaving the market is a strategically wise play. We will see when the many AI coded outages start happening if that was a wise idea.

@cb not sure that management are aware of the importance of experience when their first targets for Layoff were T4 and T3...

They'll learn it the hard way when investors stop flowing the money to AI (expected by 2027) if AI don't start generating benefits by then...

@cb That is an excellent point you make there.

The handling of very high complexity is one of the most important differences between ERP software and other kinds of software.

Therefore I am sceptical that we can copy approaches from other software vendors directly to SAP (I am looking at you, HPOM).

Preserving the experience within the company should be very high up on the agenda of SAP HR.

Business software that has to cater to legal and tax requirements of more than 100 countries and different industries is very complex. It needs experienced developers much more than search engines and mail services (Google), web shops (Amazon) or social networks (Facebook).

I am sure management is aware of this.

@OP AI is just an excuse to replace "old" and (seen as) expensive engineers with young and inexpensive ones...

SAP wants to get rid of OnPrem and put all chips on Innovation, Cloud and AI and they think that in these areas experience is not an important factor.

It's the whole software industry that is changing, nobody knows what's the right move to be safe...certainly not counting on its job in the software industry as a single source of revenue, it's becoming so volatile that you can be laid off randomly and quickly with no (logical) reason.

@bh it’s not just the 300. They’re also replacing development managers with HR because there’s a belief that they will do whatever management wants them to do with the help of this new performance management.

Not sure if you’re all aware but under HPOM, Signavio moved 27 non technical DEI coaches to development manager roles. That’s 27 “HR” employees who aren’t counted amongst the HRBP.

The Q4 and Q1 performance management results will probably kick off the massacre.

There’s a new Works Agreement to replace many IT functions with AI. I wonder if IT engineers are next target for layoffs.

@ab Totally agree but the reality is we see very little influence to them.... Can anybody tell me whywe have over 300 HRBP in Germany and how do they really contribute?

Skylab is real! Ruth Marks knows.

“AI won't be replacing jobs that use AI but rather it will be replacing jobs that DONT use AI.”

Not true.

Roles in HR, Legal, etc. use little to no AI. But they’re safe during layoffs.

As someone mentioned, the recent layoffs targeted support engineers, developers, product owners and QA engineers. They use AI in their day to day work. And most of them could have worked on the development of Joule and other AI tech.

I don’t think it matters if you use AI or not. What matters is which roles the board can sacrifice to pump up the share price to maximize their bonuses.

Our CFO and CEO have previously stated that they expect 1-2% layoffs per year due to AI.

When the Signavio experiment is completed, expect major layoffs across SAP.

Signavio Experiment:
1) Use HPOM to create layers of middle management comprised of people with little business or technical expertise.
2) These managers will utilize the new "performance management" system to give low ratings to employees in roles that the board wants to remove.
3) Terminate personnel in these positions owing to "poor performance"

We're currently at phase 2 in Signavio and Phase 1 in other areas.