Evolution in societal values and attitudes - "SAP Works Council Head Criticizes Proposed Disassembly"
In a significant move, German software giant SAP has announced a shift in its workforce strategy, moving away from large-scale layoffs towards a more gradual reduction and strategic hiring, closely linked to its AI ambitions. This change comes after the company reported a major restructuring in 2024, which saw 8,000 to 10,000 jobs cut at a cost of around €2 billion, aimed at creating a leaner organization [1][3].
Going forward, SAP plans gradual workforce reductions of about 1-2% annually. However, the company also intends to hire “several thousand” employees in 2025, focusing on roles critical to its future, such as data science, Business AI, and consulting for change management [2]. This realignment rather than contraction of the workforce indicates a strategic approach to SAP’s goal to boost cloud revenue and profits significantly in 2025 through operational restructuring and AI innovation.
The company anticipates efficiency gains from automation and AI will reduce costs, especially in sales and software development, while preserving the human element in these functions [3]. AI is expected to support sales by preparing customer conversations and documentation at SAP, but the company has clarified that it is not planning to eliminate human roles in sales, according to CEO Christian Klein [1].
In software development, tasks are being automated, and the company is entrusting some parts of its own business to sales partners [1]. SAP is expanding its partner network, including consulting firms, for some parts of its business.
Regarding employee training and job roles, SAP emphasizes reskilling as a key part of its transition. The company expects some of the new hires to come from internal role shifts, with invested efforts in upskilling existing employees, particularly in AI-related skills [2][3]. However, employee representatives have expressed concerns about the focus on workforce trimming and advocate for greater investments in employee development rather than severance, warning that successful AI integration depends on solid training and maintaining employee engagement [3].
This strategic shift aligns with SAP’s broader goal to boost cloud revenue and profits significantly in 2025 through operational restructuring and AI innovation, including embedding AI agents into products like Joule [1][2]. The restructuring implies evolving job roles, with more emphasis on AI utilization and change management in client-facing consulting, altering traditional workforce skill requirements [2][3].
In conclusion, SAP's shift towards a more gradual workforce reduction and strategic hiring, combined with a focus on AI and cloud growth, represents a complex balance between cost-cutting, technological transformation, and workforce adaptation. This move has implications for job security, required skills, and internal mobility at SAP.
- EC countries may see changes in their employment landscapes as a result of SAP's strategic workforce adjustments, with a focus on hiring in areas such as data science, Business AI, and consulting for change management.
- As SAP realigns its workforce to cater to its AI and cloud growth ambitions, there is an increased emphasis on finance, business, and technology-related skills, necessitating investments in employee development and training.
