- SAP has announced it will restrict hiring and travel to save costs as it focuses on developing artificial intelligence technologies and competing with new rivals.
- The company will pause internal travel unrelated to AI development and seek ways to cut spending with suppliers.
- SAP's executive board stated that it will focus new hiring exclusively on selected profiles, mainly core AI roles critical for long-term success.
- The company is making significant investments in AI capabilities and products, complemented by strategic acquisitions.
- SAP is revising its spending priorities to better focus on AI and expected returns on investment.
- Earlier this year, SAP underwent a restructuring program costing over €3 billion ($3.4 billion) and resulting in the elimination of 10,000 jobs.
- The company aims to avoid layoffs by redeploying workers into roles that utilize AI to enhance productivity.
- SAP shares fell by as much as 2.2% in Frankfurt trading, reflecting market reactions to the company's announcements.
SAP SE is implementing significant cost-cutting measures, including a reduction in hiring and travel, to focus on artificial intelligence (AI) investments. The company aims to enhance its competitive position in the rapidly evolving tech landscape.
The executive board stated, “Going forward, SAP will exclusively focus new hiring on selected profiles only, mainly core AI roles, that are critical for our long-term success.” This strategic shift comes as SAP seeks to navigate the challenges posed by new competitors and the transformative impact of AI on the industry.3
In addition to pausing internal travel unrelated to AI development, SAP is looking for ways to cut spending with suppliers. The company is prioritizing investments in AI-related capabilities, talent, and technologies while applying greater discipline to hiring and external spending.
SAP's recent restructuring program, which cost over €3 billion ($3.4 billion) and resulted in the elimination of 10,000 jobs, reflects its commitment to adapting to the changing market. Chief Financial Officer Dominik Asam indicated that the company would continue to cut 1% to 2% of jobs annually but aims to avoid further layoffs by redeploying workers to roles that leverage AI for productivity.67
The announcement follows SAP's recent rollout of a new software suite that integrates data, cloud, AI, and automation features, underscoring its focus on staying competitive in a technology landscape that challenges the sustainability of the software industry.
“SAP is implementing restrictions on hiring and travel to allocate more resources towards artificial intelligence development. This move comes as part of a broader strategy to manage costs while enhancing its competitive position in the software industry.”
WSJ
