In recent news, SAP, a multinational software company, has announced plans to cut 2,600 jobs in Germany as part of a global restructuring initiative. This decision will result in the elimination of 8,000 jobs worldwide. The company aims to realign itself with cloud technology and artificial intelligence (AI) according to a report by Handelsblatt.
The restructuring will involve voluntary measures such as early retirement and severance payments, as well as further training and some layoffs. In Germany, employment protection laws prevent outright dismissals, so the company is working with social partners to determine the exact number of job cuts. SAP has stated that most affected employees will be informed in the coming weeks, with the aim of completing the process worldwide by the end of the first quarter of 2025.
Despite these job cuts, SAP reported a 13% increase in operating profit in 2023 and the cloud software segment saw growth over 20%. The company plans to invest nearly one billion euros in AI by the end of 2025 to drive further growth in sales and profits. However, not everyone is happy with these changes. The European works council has criticized the lack of adequate justification for the restructuring decisions and expressed concerns about the focus on cost-cutting rather than valuing existing employees and their contributions to customers.
