SAP restructuring to impact more jobs than expected

SAP’s restructuring is having a greater impact on the workforce than originally expected. At the beginning of the year, the German software company estimated 8,000 jobs would be impacted, but according to a recent announcement, between 9,000 and 10,000 SAP jobs could be affected by the measures.

SAP officials emphasize that this is a restructuring program, avoiding terms such as layoffs and job cuts. In fact, it is currently impossible to predict the extent to which the software manufacturer will thin its workforce. Most of the 9,000 to 10,000 jobs affected will be covered by voluntary programs and internal retraining measures, SAP announced in reporting its financial statements for Q2 2024.

SAP will commit an additional restructuring expenses of €0.6 billion for its voluntary exit programs, which “primarily reflect the positive response to the volunteer programs,” the company said. Overall, SAP estimates costs associated with the program at around €3 billion. The number of employees at the end of 2024 will be roughly the same as at the end of 2023, according to the company.

But the restructuring is also causing unrest among the workforce. SAP has set its employee engagement index for the current year at between 70% and 74%. Previously, employee satisfaction was between 76% and 80%, SAP said.

The restructuring is intended to ensure that the qualifications and resources continue to meet future business requirements. In 2024, the company has placed stronger focus on key strategic growth areas such as AI. To do this, it must align its operational structure to exploit organizational synergies and achieve its own efficiency improvements through AI.