Thread regarding SAP layoffs

@ixse+1qatFwQx
is this in addition to 8K in 2024 ?

Nice!!

don't forget Dr. Holly Goodhead

awful picture but Jill St John and Lana Wood were some pretty fine birds in the 70s

@ixse+1qatFwQx You seem very knowledgeable. And since you are posting anonymously why not name the SAP Executive? I mean, c’mon I.P. Freely! Who is it? SVP Mike Hunt?

As per an SAP executive, there will be a layoff in the range of ~10K employees in 2024. Identifying these employees started in Q4/2023.

Renjen has given interviews where he has stated that now is India's time. When asked what his views about India now he is being named Chairman of SAP, he replied it is India's century.

To some extent this might all be true. But I would be watching how these views are relevant when he takes over full control of SAP. I would see a clear path away from high cost countries and movement to India for these positions. As we like to say in SAP, "lift and shift".

Job migration on positions out of high cost to low cost ( like India and China) will be one of the key transitions he will bring in with him.

ALL SUPERVISORY BOARD MEMBERS ARE ELECTED BY THE SHAREHOLDERS - Definitely NO - NOT IN GERMANY.

SAP SE is a shareholder company based on european law. As the European Union is no state major parts are still regulated by law of the member states. There is no law on EU level. Laws regarding shareholder companies are still regulated on state level. That means that German law applies as SAP SE's main office is still loacted in Germany.

There are big cultural differences between Germany and the US. Do not forget that. Things might or are to be expected to be different in Germany! That's a big problem for many US managers. Be careful! You may fail.

In Germany employees and work unions have the legal right to elected or nominate 50% (half) of the supervisory board members. Kindly check the SAP SE internet page. In reallity 50% is very week. The supervisory board members representing the capital side together with Hasso Plattner and/Punjit Renjen have the majority. Nothing can happen against them. They will decide and do not increase the salary budget for the employees but will transfer more money to the share holders.

Hasso Plattner and/Punjit Renjen do not have a strong position as in the US as the unique leader.

In the past Hasso Plattner of course has overruled that and acted as the US as strong leader. There was much protest against that in Germany by share holders (the share value was to low) but Hasso Plattner has not listened to that as the company founder.

All SUPERVISORY BOARD MEMBERS of the employees need to be reelected in 2024. This does not apply to the SUPERVISORY BOARD MEMBERS of the capital side. In the past Hasso Plattner has put at least two SUPERVISORY BOARD MEMBERS into the SUPERVISORY BOARD. The annual meeting has elected them. They will not be exchanded in 2024! Kindly check the SAP SE internet page.

There are multiple reasons that Punjit Renjen must be a little bit careful. Otherwise he might not have a majority behind him for the next 2 years.

Of course it is to be expected that SAP will be more attractive for new big share holders in the future. Currently Black Rock is owning approx. 5% - not enough to have some impact.

Let's just hope and pray that anyone who is relishing the idea of a "new day coming" to SAP is caught up in the winds of change and dragged mercilessly out to sea.

I am not sure what means Hasso "controls" Supervisory Board members not  being reelected in Mai?  In accordance with a recommendation in the German Corporate Governance Code, SAP has a Nomination Committee ( which surely was subject to Hasso's approval and going forward will be subject to Punit's  approval). The purpose of the Nomination Committee is to propose suitable candidates for the Supervisory Board to recommend when the Annual General Meeting of Shareholders elects Supervisory Board members.   I guess you could say that because Hasso and Punit most likely are approving the candidates they have influence over them? 

In the end,  ALL SUPERVISORY BOARD MEMBERS ARE ELECTED  BY THE SHAREHOLDERS.   Hasso only controls by his self 6% of the stock.  While 60% is controlled by institutional investors - it is this group who actually controls the supervisor board and SAP.

What is not known at this time is what are Punit's plans for SAP?  What will be his focus, strategy and execution plan?  Do we continue to "buy" our way into new dimensions (like we did in buying many acquisitions over the last 15 years?) or do we organically develop our own new growth product areas?

I agree with the author that it is indeed a new day for SAP and there are many questions about what is coming -  we will have to see just what Punit's strategy  for the company  is.  And I would think that if anyone on the Supervisory board is not in agreement with such plans they most likely will not be serving for very much longer.

50% of the supervisory board members are employees by German law. The capital side elects 50% of the supervisory board members. In case of a 50% to 50% conflict Hasso Plattner or Punjit Renjen have a double vote. That means that the capital side can enforce decisions against the employee side.

Not all supervisory board members of the capital side are being elected in Mai 2024. Hasso Plattner still "controls" supervisory board members not being relected in 2024. I would expect that other Hasso Plattners supervisory board members will be relected as they are dedicated experts of SAP being a very complex big company.

Basically - theoretically - the supervisory board controls the company and not Punjit Renjen alone.

It is by no means clear that Punjit Renjen has a majority in the supervisory board in May 2024. The supervisory board members of the employees together with Hasso Plattners supervisory board members can block everything.

I would expect that Punkit Renjen must be something careful - no revolution but evolution.

The maintenance revenue has been the biggest revenue stream for SAP over its history and it is what has allowed us to grow as we have done. As this diminishes and we lose (or move) more customers to Cloud platform where the overall profit (not profit margin) is significantly lower than what our ERP platform yielded, what will replace this maintenance revenue??

I have not heard how we will make up this loss, which has been tremendous cash generator. I can only surmise that it will not be replaced, and we will become a much leaner company which is not requiring the headcount we have today. This is what "transformation" means.

And please, let's not start a discussion about the focus we hear all the time about "high cost" vs "low cost" countries, because we already know what countries will be targeted for RIF.

Still with a huge and highly profitable maintenance business and overperforming in on premise but just able to deliver same revenue and margin as Salesforce with 30.000 more employees.
Some businesses such as CX decreasing YOY Each quarter.
Running an innovation and transformation theater for years but having zero digital transformation strategy while running and customizing old internal systems, booth increasing its organizational and technical debts.
Such a low customer NPS clearly challenging its product and service strategy.
No doubt SAP will go through turbulent times, so obvious and so late.
Good luck to those who want or need to stay, I just decided to join a real transformation outside

There is overall less profit margins in the Cloud than our ERP business which SAP was built on. The biggest differentiator between Cloud and ERP profit was our continuing income stream for the life of the customer by way of annual maintenance costs. It spun off enormous an amount of cash. Siemens by itself was paying $50MM annually just in annual maintenance costs!

Cloud offers none of this and each customer must be " renewed" every year or they jump to another platform. The idea of our transformation is to capture a significant portion of the cloud business to offset the loss of good profit margins and maintenance cash ERP offered.

Let's face the facts, SAP is not currently staffed up to be a lean business transforming itself to a Cloud company, but rather we are still a huge company that was built on huge ERP platforms. It's why cost and expense management will play a big part in transforming SAP for the foreseeable future.

I an sure that a new Chairman will bring changes. As the saying goes, a new broom always sweeps clean.

However on a different note, I struggle to see how someone who has never been in our industry can lead the company, especially during these times? How long will the learning curve be, how many mistakes will be made, etc., no one knows.

But what I don't understand why we didn't select someone who has direct knowledge of the SW, ERP, Infrustructure, and Cloud business wasn't brought in who could use their experience to lead the company from Day 1.

Somebody like a Jim Hagemann Snabe would have been ideal, somebody who knows not only our business but also our company would have been perfect.

I guess time will tell if this was the right move.

IF “the margins are extremely lower than our past business” then we are all swimming in the wrong direction and the entire board should be fired. This entire “transformation”’s aim is to increase if not double gross margins especially on services…

It will definately be a new day. Hasso and Dietmar only controlled about 12% of the stock, but with Hasso holding the chairman role it was enough to keep the investment houses at bay.

If anybody thought the bloodbath caused by the Elliott group was over when they departed, better think again.

The company will now be much more reactive to investors than they ever were before and it will be all about ROI.

Fire anyone roaming WDF building with SVP title - Absolute garbage !

SAP needs to be more like ServiceNow, less costly than SN and also show prices online like Salesforce. Small business knows to steer clear of SAP a Money Eating Machine.