Thread regarding SAP layoffs

@5hvx+1r6LhlCA

Agreed. I suspect Dominik Asam is probably scratching his head when he looks at his own Board Area, where each of these acquisitions in NA maintained their own independent finance areas and we had at least half a dozen (or more) of folks in NA walking around with a CFO title.

Who's in charge of this finance operation anyway in NA and what other company would have all these parallel CFO positions in one location?

I would expect NA ( and specifically US) to be the focal point for the layoffs. This is because the HC has grown significantly over the last 15 years as a result of all the acquisitions SAP has made which have been almost entirely in this region.

Making the matter even worse is that the locations of many, and certainly for the larger acquisitions, they have all been in very high cost locations (i.e. California, Seattle, Vancouver) driving up HC payroll costs even higher for this region. As there was never any effort to consolidate roles and responsibilities and each of these acquisitions continues to operate just as they did prior to the acquisition where there is duplication of roles and never was any efficiencies or economy of scale attempted.

I think our new CFO Domink Asam, is not just looking for a particular HC number to be reached in the layoffs but rather a financial reduction to be achieved once this round of layoffs is completed. I think a CFO who is new to SAP and who is looking at this from abroad will see a very expensive fragmented regional operation and will set a target number on the overall payroll which must be reduced by. He would be well aware that it's not only just the direct payroll cost but all of the ancillary costs that significantly increase SAP's cost to run in the US, things like; Facility costs, Health Insurance Benefit Contributions, Lunch programs, etc.. These all contribute in a big way to the bottom line cost to run operations in NA and the question is does a CFO ( or for that matter any of the Executive Board who all but one are based in WDF) see real value to keeping such a large footprint in NA ? Sales they want for sure from NA, but keeping people here is another story.

This may be the worst so far of the layoffs for those in NA and particularly in the US,

It's  not that easy to prove age discrimination in the US.  In order to do so the affected employee would  have to prove they were replaced by a significantly  younger person, and prove that the layoff  which was implemented detrimentally impacted older workers and prove that younger employees of similar capabilities were treated better.  That is a lot of facts which one would have to establish.    Plus all employees in the US are considered Employees at Will,  meaning that an employer can terminate an employee at any time for any reason, except an illegal one, or for no reason at all without incurring legal liability.

However, to be fair,  SAP has always been generous  with its employees  and always gone beyond what is legally necessary to ensure they are not encroaching over any legal responsibilities.

The fact is that the VERP is "VOLUNTARY''  - No one is being forced to accept it or not.    Everyone can decide on their own if they want to take it or stay with SAP.    If at some point later on  financial circumstance result in another round of  layoffs you can bet that if there are employees in the target age group who are being considered to be let go, that SAP will have it's HR and Legal organizations looking very close at the specific  situation to make sure they are legally  in line.

I took one of the earlier VERP's and my advice is to evaluate your own position in the company and how much you enjoy the job and also how confident you are in the future of SAP to be an "expanding" company vs a "downsizing" one.    Don't' treat the VERP like some sort of  gambling bet  where you think you can  bank of the fact that if you get laid off later on you can immediately sue for age discrimination -  but rather look at it  more like an opportunity - think about what you want to do with you life and if you want to continue doing so with SAP.

Re: "What happens to the folks that do not accept the VERP? Are they likely to be laid off anyway?" I doubt it -- it could potentially be deemed as age discrimation.

What happens to the folks that do not accept the VERP? Are they likely to be laid off anyway?

Layoffs notifications will begin first week of April. VERP deadline to accept is April 1, they are of course already tracking on a daily ( maybe hourly) basis how many eligible people are opting in (or out) of the Package. So they know where things stand and they also know on an important decision like this very few will wait till the last day to accept. Based on past VERP's and market info they know pretty well what the final number will approximately be.

Having managed thru past layoffs, I know that each Board Area has already been provided a target number of layoffs they will have to contribute. Each Board area has then pushed this down to a Regional basis and then to a team level. If 2 percent of the eligible workforce accepts the VERP ( 2,200) - keeping in mind that in Germany and maybe France where there is a Works Council, those over 59 cannot be laid off and so for these they may very well decide to stay employed ( keeping all their benefits in place). That leaves about 6,000 in focus for layoffs to get to the 8000 number ( if that is really what the final number is).

Those who do get notified beginning of April, will of course get some sort of severance package, but will have to physically leave SAP by end of April.

This is not looking good for North America where if you are not in a revenue generating role, things look pretty bleak.

Will be interesting to see which individuals are selected for layoffs. In the past, it was more about just bringing down the HC numbers with no regard towards salary, so all that mattered was just putting a name on the layoff list.

Now I am wondering if in this round, SAP will pick off the more expensive T3's & T4"s instead of the T1 and T2 and focusing on getting the biggest impact on payroll reduction with these layoffs. One well paid T4 could make up for 3 or 4 T1's or T2's.

Don't think this will end the layoff cycle we are on and likely will be more rounds to come, especially if profits are not as expected. There is far too much competition in the Cloud space from what SAP has been accustomed to in past decades - I see CK. Hasso and the two Boards now managing SAP bottom line by cost reductions vs increased market share.

I have to say I am not sure if you are laid off that you will be able to come back to SAP. Seems to me that SAP would want people with relevant company history to come back to work, but I think it most likely depends on which country you are from.

Basically this whole exercise of VERP and Layoffs is all about bringing the HC down in expensive countries, so in the end I think if it is a high cost country, probably you are not coming back.... but as I said, I am not certain about this.

3dxg+1r6LhlCA accept by April 1 and last day April 30

Depends on the kind of layoff on if you can come back to SAP (I’m guessing). Last year (2023) was a targeted restructuring which is a different kind of “layoff” (and saves the bottom line). But allows the return after 4 years (but a rehiring would depend on SAP wanting to do that) or the SAP employee would have to move out of the targeted area/location/board area. I’m not sure they could do that again this year.

What is the deadline to decide whether to accept the VERP offer?

@3wxh+1r6LhlCA

In Germany while the negotiations for the VERP have just started, it will look very much different than other countries ( which was the point of the original post on this thread). I would suspect that once the Works Council comes to an agreement on what the package would look like, it will likely be months before the actual departures take place.

More so in Germany there are many more older worker in Germany ( which are more highly compensated than younger people) and also because layoffs are off the table the VERP will have to be much more attractive to get people to sign up, otherwise they would be fine to just stay employed with SAP.

Also many people in Germany are receiving a form of "deferred compensation" (separate from a 401 plan) where they are able to take what amount they want from their paycheck and move it to an investment account which then reduces their taxes for the current year and also moves this money into a sort of savings account which they get access to when they retire. So once the negotiations are complete for the VERP, the folks in Germany will have a pretty sweet deal. But we will have to see just how many take it - and of course the fewer who do take it will bring more pressure to the layoff numbers.

Anyone gotten the strange and retracted email over the weekend? It pertained to an extension to VERP for business critical employees..then it was retracted and said it does not pertain to VERP :D later found out there's an actual transitionextension team - with their own D/L . and their response was "this is only for a subset of VERP eligibles". Hmm

Does anyone know if you do get laid off and receive some sort of severance payment, is there the possibility to return to SAP if something comes available?

I know for the VERP, you cannot return to SAP in any capacity but was not sure about the rules for layoffs.

@3nta+1r6LhlCA for Germany your statement is not correct.
The german workers council has just started negotiations on a voluntary program. The goal would be to have a similiar agreement like 2019.

I'm working in France and I've been told there won't be VERPs in France and Germany, because it would be too expensive for SAP in our countries where workers are well protected by unions and strict laws...

Once the VERP deadline is over and they know how many have taken the package they will start with the layoffs in earnest. 

High cost locations with all  positions in  "non sales" areas will be hit hard -  since they cannot touch Germany, means NA will be decimated.  Fact is none of knows if it will really be 8000, 10,000 or something else when this first   phase is over. 

March will be a cruel month for folks in some regions. but for CK and the rest of the Board, Hawaii was just great......Thank you very much everybody for all your contributions !!

in NA, VERP is offered to employees who will be 59 by dec 31, 2024

@1kkz+1r6LhlCA Are you in NA? What is the age cutoff for VERP in NA?

T1 employee here, can confirm that my last day will be in April, 4 weeks per year. I'm 58 and this would've been my 12th year.

As far as reskilling, this was a ruse by CK, to make it seem like they were going to attempt to take care of people to avoid layoffs.... you know, just like he said 2 years ago, we now all can work from home " this will be our new normal" ...( everybody remember that one...?)

Well just like the reskilling BS, all these comments are just intended to sound good for the moment that such a statement can be of value to them and in the end they mean nothing.

There will be no defined reskilling program - period, full stop...forget about it.

country to country comparison? for what point? maybe instead of wasting your time you should be proactive about taking some control of your own future at SAP (or elsewhere) instead of as you said, "just sitting and waiting."