How likely is that there will be SAP Layoffs 2021? Any news or rumors?
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My position was eliminated at SAP this summer (2021). My org unit did that to 5 of us. Don't know about other org units.
Winter is coming - for sure. The overpaid 20x revenue Qualtrics acquisition and then 18 month later spin-off caused a huge loss. Revenue and margin targets were severely adjusted negatively and the market didn't buy it after the Q3 earning call collapse in stock value and market cap. They're way behind in moving onPremise legacy ERP customers to the new S/4HANA ERP application suite (and resulting HANA DB), with slow progress in S/4HANA Cloud volume. Other cloud areas have suffered tremendous setbacks and missed targets, no doubt influenced by COVID-19. They are also a company that does not measure formally employee performance outside of quota carriers, which seems radical in approach. Therefore, they often lay off the wrong people judging by the threads out there and big names gone to other big tech companies. I have also heard - perhaps by their policy - that they do not issue temporary pay cuts or plan adjustments like many other companies do. You either keep your current package (grandfathered / protected), whether overpaid or not, or lose your employment. There's no in between I've heard. So, when times get bad, expect a lot of layoffs with this company.
Any news on potential Of VERP being offered early in 2021?
The real question is on-premise maintenance and how many customer decided to cancel their contracts in Q3/Q4 2020.
If these numbers are large - no amount of layoffs will right-size profitability in 2021.
Looking at the numbers and projections, I would say it is inevitable. No choice now but to cut deep. Meaning German employees this time will have to take the brunt. Asia, Latin America, and the US took the cuts last round to boost margins. Not much left there.
Works Council hands are tied now, either cut deep in Germany or go out of business.
Maybe France or the UK take a big hit? but with French labour laws seems unlikely.
Based on my analysis, they need a 10% reduction in force to keep margins.
The sell of Qualtrex leaves them at a 3 billion loss. To account for that they need another 5% RIF. Unlikely, they would cut 15% of the workforce in a 1 round.
This means 10% cut in Q1 2021 with a hiring freeze allowing for natural attrition for the remainder of 2021 to pick up the 5%.
It should be good for the stock price in the short term, layoffs always are. Quick margin boost.
Long term outlook ( 5 year plan) looks bleak.