Restructure details regarding Layoffs at SAP

Layoffs at SAP impact 8,000 employees.  German tech major SAP has announced a 2 billion euro ($2.17 billion) restructuring program for 2024, as it focuses on AI.

“In 2024, SAP will further increase its focus on key strategic growth areas, in particular Business AI. It also intends to transform its operational setup to capture organizational synergies, AI-driven efficiencies and to prepare the company for highly scalable future revenue growth,” SAP said in a press statement.

The company had 107,602 full-time employees at the end of December 2023. It is not clear how many employees are likely to lose jobs as a result of the restructuring. However, SAP mentions that most of the 8,000 affected positions are likely to be covered by “voluntary leave programs and internal re-skilling measures,”. This means that despite the restructuring, the headcount will remain the same by the end of the year. Last year, the company announced that it would be cutting 3,000 jobs.

Analysts believe the restructuring will help SAP find the right balance between experience and skills to grow in AI. “SAP’s intention is to change the employee mix while keeping the headcount in a similar range this year. This means that SAP will be looking to change its experience mix and skill mix. The voluntary retirement of senior people enables SAP to hire generative AI experts. These new employees will most likely be younger, thus the experience mix change.

“On the other hand, the reskilling of existing employees in Generative AI coupled with the addition of external GenAI talent will change the skill mix. The move is similar to other software enterprises. Google and Amazon are also making job cuts in 2024 for change in experience and skills mix,” says Pareekh Jain, CEO of Pareekh Consulting. The SAP restructuring program is in line with several tech companies.  Google, Meta, IBM, Salesforce, and Amazon all have announced layoffs recently.  All cite the realignment of their teams and operations for the AI era as the reason for the layoffs. Google CEO Sundar Pichai recently warned of more job losses in 2024.

Severance pay for Canadian SAP employees

In Canada, SAP employees not part of a union are entitled to receive their full severance pay in the event of job loss due to downsizing or corporate restructuring. Various factor can impact a severance package, potentially spanning up to 24 months of pay. In case of mass layoffs of 50 people or more in Ontario, employees may be entitled to a greater severance package. Those not receiving their complete severance amount have the right to pursue compensation. We advise seeking legal counsel to ensure individuals facing layoffs at SAP receive their entitled compensation.

At Whitten & Lublin, we understand the challenges associated with job loss or termination, recognizing it as a stressful experience. Our team of experienced employment lawyers will guide you through the available legal avenues. This ensures you receive the rightful compensation owed to you. We encourage those affected by recent layoffs in Canada to reach out to us for a consultation, accessible through our online portal or by phone at (647) 951-7460 today.