SAP’s recent corporate restructuring announcement 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, the company confirmed it would implement changes that would affect about 8,000 employees, or about 7% of its workforce, through “internal retraining measures” and voluntary leave programs.
The controversy surrounding SAP’s restructuring efforts intensified when an internal email was leaked, obtained by German media Handelsblattrevealed an accusation from the European Works Council, which castigated SAP’s management for what they perceived as an inability to adequately justify the rationale behind the restructuring.
SAP accused of laying off employees as part of a transformation program
The email shows that Germany is bearing the brunt of the cuts, with as many as 2,600 workers in the country affected by job losses. The letter also accuses the company of implementing the plan “solely or primarily based on cost, and not on the actual value that existing employees, teams and locations represent to our customers.”
In response to the allegations, an SAP spokesperson responded (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 volunteer programs, as well as working closely with our social partners in relevant regions.”
SAP has also committed to notify affected employees in the coming weeks and complete global reorganization efforts by the end of the first quarter of 2025.
The spokesperson added: “SAP will continue to invest in key growth areas and plans to end 2024 with a stable workforce.”
Although layoffs are down from last year, if SAP does indeed lay off 8,000 employees globally, it will be the largest workforce reduction since layoffs began after the pandemic, with a smaller (but still significant) reduction of 3,000, confirmed in January 2023. .