"Like brushing your teeth": SAP plans continuous job cuts

The European Works Council of the software group SAP is warning against a program of continuous job cuts at the company. According to a report in Handelsblatt, the employee representatives have expressed “deep concern” about the plan in an internal email and warn of “long-term damage” to the company.

According to the report, this relates to a plan already announced in July by the Group Management Board around CEO Christian Klein to make smaller job cuts every year instead of large-scale reduction programs such as 2024. “In one year, it could be one or sometimes two percent of jobs that are eliminated,” CEO Christian Klein told the news agency dpa. In 2024, around 3,500 employees in Germany left the company with severance payments, and around 10,000 jobs are said to have been lost worldwide.

Overall, however, SAP still wants to increase the number of employees, especially in growth areas. According to Handelsblatt, CFO Dominik Assam compared the program to routines such as brushing teeth. “It won't be anything special,” the business newspaper quotes him as saying.

“Short-term financial goals”

The works council apparently takes a different view of the cutback plan launched in September under the name “Project Mongoose.” “In our view, the measure appears to be geared more towards short-term financial goals than strategic transformation,” Andreas Hahn, chairman of the European Works Council, told Handelsblatt. According to Hahn, the SAP Executive Board could use job cuts as a permanent instrument if financial targets require it.

When asked by the iX editorial team, SAP explained, “As our industry undergoes a profound transformation driven by AI and cloud, we are focused on the continuous optimization of our processes and structures as well as strategic investments in future capabilities. As announced in July, we are making targeted investments in training and hiring in critical growth areas. As also announced in July, we are planning targeted measures that are expected to affect 1–2 percent of our global workforce in 2025.”

Up to 2,200 jobs this year?

SAP did not provide any information on the regional distribution, affected areas, or the specific number of people made redundant. The question whether the newly introduced performance evaluation program will be included in the selection of jobs to be cut also remained open. With currently around 109,000 employees, up to 2,200 jobs could be impacted.

The German workforce is currently covered by a job security agreement until 2026, which protects against redundancies. SAP would probably have to make severance payments to cut jobs in Germany.

According to Handelsblatt, SAP's European Works Council is also unclear about the exact extent of this. There is a “lack of transparent and clear communication” from the Executive Board about the planned savings and the impact on sites and customers. Eberhard Schick, chairman of the works council of the parent company SE, recently commented on the job cuts to dpa: “If you want to replace one to two percent of the workforce every year, then that shows a change in culture at SAP.”

(axk)