SAP’s European Workers Council has slammed the tech giant’s planned restructure in an email leaked to Handelsblatt, a German Newspaper.
The email also shared that 4,100 of the 8,000 impacted jobs will come from its European remit, with 2,600 based in Germany.
SAP will likely notify most of the affected employees within the coming weeks.
In January, SAP announced the plan to eliminate 8,000 roles but reskill many of the affected workers for the age of AI and offer them new roles.
At the time, Christian Klein, CEO of SAP, told investors during an earnings call: “It is important to be clear this workforce transformation will include a restructuring component. We intend to allocate roughly €2 billion for this.”
Yet, the Workers Council has now hit back, claiming that the move is more about workforce reductions than “transformation”.
In addition, the internal email – sent on Friday – argues that SAP’s management had not adequately justified the business logic behind the move or provided precise information about the inefficiencies it aims to overcome.
As cited by Handelsblatt, the email – originally written in German – states:
[SAP appears to have made decisions] solely or primarily based on costs, and not on the actual value that existing employees, teams, and locations represent for our customers.
At first, SAP received praise from many quarters for its transformation program, challenging the “hire and fire” culture within many high-profile tech firms.
Its stock also jumped seven percent on the January announcement, taking it to an all-time high.
Moreover, Europe’s largest SaaS manufacturer offered assurances that it didn’t expect to end 2024 with a smaller headcount than the 107,602 employees it started the year with.
Nonetheless, these assurances appear to have done little to convince its own European Workers Council.
Two Rounds of Layoffs In 12 Months
In January 2023, SAP cut 3,000 jobs – making it the first year in 14 that the stalwart ERP and CRM provider’s headcount had dropped.
Back then, the aim was also to restructure the business, with SAP soon selling off its 71 percent stack in voice of the customer (VoC) software leader Qualtrics.
However, in January 2024, SAP decided to go further in the name of AI – linking the second restructure with a €1BN investment in AI use cases for customers – which it promises to deliver in the next two years.
Justifying the decision, Klein hailed generative AI as “the greatest opportunity since the rise of the cloud, especially for SAP.”
As such, a further restructuring may seem necessary. Yet, its self-aggrandized plans have missed the mark with many employees, who want specifics as many of their jobs hang in the balance.
Unfortunately, SAP is far from the only enterprise tech firm to have announced layoffs in 2024 – with CX Today also reporting on job cuts at AWS on Monday.
Elsewhere, SAP became a founding member of the AI-Enabled ICT Workforce Consortium last week, promising to upskill two million people worldwide by 2025.
Somewhat ironically, the consortium aims to identify the roles most affected by AI, facilitate access to relevant training, and connect skilled workers with possible employers.