Thread regarding SAP layoffs

The stock price has falled again from the after-market up, as some insight reports indicate:
· The NPS score dropped from 12 to 9, so it was replaced with "Cloud CSAT" (which tracks only cloud customers);
· Free Cash Flow figures were lackluster, so gains from asset sales were incorporated into the calculation basis, while interest expenses were stripped out of operating cash flow;
· Share-based compensation (SBC) expenses shrank significantly due to a decline in share price—a factor that directly boosted the P&L statement.
Only through these maneuvers did the Q1 results finally manage to look "not too bad."

@108 DMs must be hands-on managers... like HR?

@f1 I guess it depends how HPOM was implemented in each area. Is it sad to see that a program aimed to increase product centricity managed to create doubt and move people in unfit roles. HPOM guidelines were clear: DMs must be hands-on managers.

https://www.bloomberg.com/news/articles/2026-04-23/sap-reports-cloud-growth-that-beats-estimates-in-ai-push

@fe Like HR

@fm Isn't that really by design? These employees never get laid off unless they want to be laid off and get a lot of severance.

Many SAP employees are to blame for this as well. In many areas, the SAP employees support group executives and L1s and L2s no matter what happens. These L1s and L2s could ask for a pint of blood and a pound of flesh and some employees will just give them that. And they would of course give them the best possible unfiltered ratings. They are what we call "If the Führer knew" in German satire.
https://en.wikipedia.org/wiki/If_the_F%C3%BChrer_knew

Our management is predicting that the unfiltered score for trust in leadership will skyrocket this time. I wish I could say that would surprise me. But they made sure to do several reorganizations to have less than 7 employees for new managers and bad managers. And in every meeting they keep talking about how it could have been worse but so and so L1 saved our area. They are treating the unfiltered as a general election.

@et SAP's L1 and L2 management is often just a system for rewarding people whose only consistent output is inefficiency. Incredible.

We need management that nails the execution, not bubbling about fantasy strategy which simply copy from others. But of course later is way easier.

We need more managers . Manager who are actually business owners , not people managers

@f0 In my area most PMs turned into DMs.

Let me put it this way: this was often not an ideal situation for the affected teams.

@de how are product managers targeted by HPOM? In my unit, there was a strong emphasis that we need product managers in a 1:1 ratio with engineeering teams. HPOM led to hiring more PMs. There is also a decent investment in the PM Accelerator, aiming to upskill PMs. As of Product Owners, mostly transitioned to PMs.

@et well said. People have been saying some of these things for a while now - all the decent RISE deals are done, any we sell from now are going to be a lot harder and require much much more investment from us to get over the line.

Latest policy about us starting to lock down APIs is interesting. While we talk about all our partnerships and BDC, its becoming clear databricks, snowflake, palantir as wel as the cloud platforms are the new "enterprise tech" layer and are eating our lunch. We're becoming a d-mb database, lots of our $$$ solutions are quite simple, can do the calcs / logic in other analytics tools for many many use cases we cover.

Thank you to the transparent HR person here who speaks the truth. What do you do when the ship is sinking? The ones in the know take all the valuables and row away in a lifeboat. Just like the Titanic - the first class will get a lifeboat and the rest are left to drown. Make no mistake - the ship is sinking. Maintenance kept this ship afloat and that is reduced every year. AI will make it possible for any entity still on ECC to migrate to a new platform that is not S4/Hana by replicating all the customisations. RISE opportunities are all but gone. What's next to flog to our customers - Joule? SAP standard strategy is to pull forward deals from Q1 into the previous year's Q4 - so Q1 numbers rarely meet forecast. Add global instability, rising cost of energy, and some markets in a standstill (likely no one in MEA is making big ERP buys right now or transitioning to RISE) - the numbers will likely be bad. The market already suspects bad numbers - that is why the stock is dropping. I can't believe it but it may even go below 140. Almost all gains wiped out from the last 5 years- and yet Christian (and all the execs) want a bonus. Network, obtain certifications and have 6 months' of salary saved - because the layoff tsunami is coming. All those people laid off in P24 and all the other layoffs and in the end, it was pointless. So much for DA, CK and our terrible L1 and L2 leaders - they have done nothing but collect bonuses and rewards and fattened their own pockets. Companies have to stop focusing on short term gains, like stock market bumps from layoffs, and really priortise the long term health of the company, which is never made better by layoffs, reactionary thinking or copying the strategy of others. Leaders need to articulate a vision - and then the charisma to inspire followers. Working at SAP and Airbus does not give you a foundation in risk taking or bold strategy. I said a long time ago - they should hire a CEO of super successful cloud startup if they wanted to be prepared for the next generation of innovative products - but no - let's stick with the same model until it's too late.

@e8 Because that will be done by performance management without payoffs rather than in large chunks with large payouts.

@e5 the CFO has literally said in multiple interviews that he wants 1-2% of SAP employees laid off every year in the tooth brushing exercise. Even if they do not announce layoffs today, they will get rid of more employees. So I am not sure why there are so many comments saying there will not be any layoffs.

Do not worry. I don't think there will be layoffs.

I work in HR and I’m also so mad with our management. All throughout the HPOM journey, management kept saying that HPOM is not an optimization exercise. And now it seems that it was exactly an optimization exercise so product owners and managers could be laid off. The current culture is so anti-employee and toxic at SAP. And we’re asked to fix it by coming up with new “values” and “trainings to improve culture”. HR management is really out of touch. Step one should be being respectful to employees and having more transparency towards the layoff situation so they can plan better. Instead SAP plans to shock the market to manipulate investors into propping up the share price. SAP really needs to get rid of the “area executives” layer as they’re the ones who come up with all these plans that the executive board pushes down our throat. The Betriebsrat is a paper tiger with no real power. And the supervisory board can easily correct course but they are busy drinking the kool aid and stepping on employees to maximize executive bonuses. They want to increase CK’s bonus for this year compared to last year’s because CK is mad that it was so low. CK has one job - a fiduciary duty to maximize shareholder value by bringing up the share price. He has failed spectacularly as the price has been dropping like a rock in water. Yet the supervisory board are in awe and think he is the smartest man ever to be born. It’s pathetic.

trust your board

Some points of note:
1 - even if the results are good, if they compare poorly to other tech companies, investors will bring the share price down
2 - the executive board will likely lay off employees so they can increase the dividends but this will only show the market that they do not have a real strategy
3 - AI has very high opportunity costs and it kept SAP too busy to deliver most features promised to customers that they have been desperately asking for so even if the results are good, customers will churn or look for alternatives
4 - even if the share price goes well and everything is amazing, the executive board will blame the market, current affairs, the wars, investors and most importantly employees because for them these are all just dirt under their boots and should be treated as such
5 - the market has very high expectations from SAP because SAP has ERP data which is a great opportunity to bring features that can change industries but SAP will continue to double down on chatbots and visual product changes and stuff no one really cares about so this will bring the share price down again
6 - even if the share price goes below 100, the supervisory board and works council will collude to create enough layoffs and reduce employee benefits to allow multi million bonuses for the executive board
7 - SAP will continue to lose more and more European government contracts because the boar decided to not collaborate with companies that will improve European sovereignty but instead double down partnerships with companies like palantir so they can weaken European democracies

Should be good . No need to panic

@a3 Seeing this comment a lot - what is the context of "read my hips" - is this a famous misquote or something?

I think its all speculation, all the emails I've seen from emea have been positive so far

Read my hips: there will be no layoffs.