SAP plans to cut 14% of staff in Germany, while focusing on artificial intelligence for future growth
Germany’s leading software company, SAP, is planning a drastic reduction in its workforce, financial newspaper Handelsblatt reported on Monday, citing sources in the company.
Around 3,500 out of 25,000 employees in Germany are expected to sign early retirement agreements, the paper said.
This move is part of the company’s “Next Level Transformation” program announced in January, which could eventually impact 10,000 positions across the organization.
The plan has drawn criticism from European Works Councils, representing staff in transnational companies. They describe the scheme as a “euphemism” for mass layoffs, claiming that management has failed to provide a clear justification for the cuts.
The restructuring is part of a broader trend in Germany. According to a recent survey by the Institute of the German Economy, four out of every ten companies plan to implement job cuts in the new year. A total of 38% of firms say they will reduce their workforce due to poor economic prospects, while only 20% maintain an optimistic outlook, and 40% expect a decline in their business.
In January, SAP announced it would focus heavily on artificial intelligence as a vital growth area. The firm has joined numerous companies in shifting their strategies toward AI.
SAP’s stock price has surged by 75.7% over the past year, but employee sentiment is at a low point due to the looming cuts, Handelsblatt said. The Institute of the German Economy has said the country’s steady increase in job numbers since 2005 has come to an end. Economists are predicting lasting job losses nationwide, particularly in the industrial sector.
