SAP’s recent announcement of a corporate restructuring effort has sparked controversy, with the European Works Council accusing the German software company of using the program to cover up widespread layoffs.
Earlier in January 2024, the company confirmed that it would be making changes affecting around 8,000 workers, or approximately 7% of its workforce, by means of “internal re-skilling measures” and voluntary leave programs.
The controversy surrounding SAP's restructuring effort intensified when a leaked internal email, obtained by German media outlet Handelsblatt, revealed an accusation from the European Works Council, which slammed SAP’s management for what it perceived as a failure to adequately justify the reason behind the restructuring.
SAP accused of laying off workers under transformation program
The email reportedly reveals that Germany bore the brunt of the cuts, with as many as 2,600 workers in the country affected by job cuts. The letter also accuses the company of executing the plan “solely or primarily based on costs, and not on the actual value that existing employees, teams and locations represent for our customers.”
In response to the allegations, a SAP spokesperson commented (via The Register):
“In January, [we] announced a company-wide restructuring program to prioritize strategic growth areas, including business AI. We are committed to carrying out this restructuring, which will impact 8,000 positions, with care and empathy. This includes offering internal alternatives and voluntary programs, as well as working closely with our social partners in relevant regions.”
SAP also committed to notifying affected employees within the coming weeks, and completing its global reorganization efforts by the end of Q1 2025.
The spokesperson added: “SAP will continue to invest in key growth areas and intends to end 2024 with steady headcount levels.”
Though layoffs have slowed down compared to last year, if SAP is indeed laying off 8,000 workers globally, it will be its biggest reduction in headcount since post-pandemic layoffs began, with a smaller (but still significant) reduction of 3,000 confirmed in January 2023.
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