Thread regarding SAP layoffs

I do believe Luka is taking the fall for the performance of the company ( maybe it's fair and maybe it's not). I guess you can make the argument either way but when the investors or Chairman are not happy about poor stock performance, it's usually the CFO who takes the blame. There are some others who I think are also responsible for the turmoil over the last years and also deserving to be shown the exit door. But in the end I really doubt that Luka will "be here" for another year, most likely as soon as another CFO is found, he will be gone and by keeping him in place for a year they give themselves enough runway to complete the search, it's pretty standard. His contract was just extended until 2026 so they have to pay him anyway.

Bill M, Michael Kleineimeyer, Stefan Reis and others on the Board were also given extended departure dates so this is not a new idea. True, Bill M's departure was more like a celebration of his time at SAP than a push out by Elliott. But in the case of a CFO position, if they made an announcement that he was being removed immediately (or without a replacement already in place) the stock would have surely sunk like a lead balloon and the investors would have publicly demanded information about what was going on. to prompt such a move.

The biggest tellmark that Luka's departure is being forced is that the announcement that he is leaving was without any reason whatsoever as to why? Nor was there an announcement that he is going to a new / similar position in another company. All we got was a one sentence statement that he is leaving next March and we thank him for his contributions. . Sometimes it's what you don't say that says everything, and I believe this is one of those cases

@OP+1fWJPuks If Luka's departure is related to the stock performance, why would they give him another year to cause more damage? If he were shown the door quickly and unceremoniously I might agree with you. But, basically, he is around for another year and its all got the feel of a farewell tour. I don't know. I think there's something else at work here.

@icnh+1fWJPuks Not until you list all of the names of the Board Members who have been terminated in just the last 3-4 years do you see how much of an unstable mess the leadership of SAP has been.

The accountability for this all goes directly to one person who pulls all the strings of who sits on SAP Board. Could not agree more, it's time for a change out with this individual before the lack of a stable and competent board impacts all of us in a negative way.

BTW, for those of you holding employee stock, take note that at this May shareholder meeting, the individual responsible for picking all of the Board Members as well as several of them are up for election to the Supervisory Board - I see it as as lose/lose situation.

To the question about 20 -25 % layoff target and whether this is too large of a number. It most likely would not be if it were done evenly across all regions, but for those like me who was here in 2008/09, heard Leo at at time, after the All Hands call was "over" commit to the attendees in WDF audience that there would not be any layoffs in Germany. This statement was shared by many of the German colleagues to their team members in other regions - the layoffs of course occurred in other regions but mostly in the US and none, if any, in Germany.

The same till applies today, almost no other region besides Germany has works council representing them or employment contracts up and down the entire employee base.
Therefore YES the 20-25% target could be a very realistic number depending on how hard the investor community wants improvement ( hopefully there is not another Elliott in the mix) because the other regions will have to make up the difference of "no layoffs" in Germany and therefore the target number will have to increase.

Some people on this platform either have rose colored glasses on or have very little knowledge as to how SAP is structured with protections for certain regions.... you need to understand only one thing - we work for a German company and there will be bias built into such downsizing decisions.

Don't really know what happened with Luka, but given that there was no explanation  at all as to "why" he leaves SAP,  it is very questionable what caused this.
I work for SAP and now on an assignment in St. Leon Rot and not until you put all of the recent Board departures does it hit home as to how pervasive these departures are.  
You just get immune to each of these mails  that come around  twice a year about another Board Member leaving  and  assume that this is just how  everybody  operates.   But I know first hand that new Board Members means  starting all over again with new directions, projects...etc  and this is exactly where all of the turmoil we face everyday emanates from.   It's really bizarre when you think about the list  of just the last 5 years of all of the Board Members who came and went..

I agree that it is too bad that Luka takes a fall for the performance of the Company but he has been here the longest of the Board and is in part responsible for the lackluster performance and on the other hand look at what is left of the Board and who of these would you pick to take the fall?

Not one of the people we have now on the Board , was around just a mere 3 years ago !! McDermott, Enslin, Stefan Reis, Michael Kleinmeyer, Jen Morgan, Bernd Leukert, Adair Fox, etc. are all now departed in just the last few years. It is stunning at how outrageous this level of corporate instability is. Behind all of this is the SAP Chairman who is playing musical chairs with the Executive Board and what should be our corporate rock and bell weather demonstrating stability and continuity for both our employees and customers. but this is clearly not the case at all.

The average age of the Board is now a youthful 44 years - means that some are in their 30's - and all of them had NO PRIOR C-Level experience. This is how a major Global Company with Market cap of $127B is supposed to run? It's laughable, but clear that Hasso still wants to pull all the strings and for this he puts in a group of amateurs to rubber stamp his decisions. It really pains me to say this but I have been with SAP ( West Coast) for many years and saw a company go from being the target everyone wanted to emulate to now being a fumbling mess that is in constant turmoil.

I would completely agree that the major investment houses have had enough of the poor performance and corporate merry go round with inexperienced leaders running the company. We should have had the most experienced people the industry has available with proven track records of success in multiple companies guiding our ship.

If the Stock price keeps falling backwards, the internal corrections may not even wait for new CFO next year to address the situation. and I also would not be surprised to see a new SAP Chairmen sometime this year. I think it is time for a change;

It’s unfortunate Luka is the one taking the hit instead of the obvious person who should own the revenue side of the business. Instead, we have some visits in Japan while all this drama is going on. Meanwhile, there is a half hearted effort to improve the solution portfolio with more branding exercises! SCP becomes BTP! Industry add ons are reborn as Industry Clouds, never mind a huge part of the solution is still on premise. Like lipstick on a pig. The field team do their ra ra even louder. Now, let’s hope the customer is convinced of the changeover!

@gcen+1fWJPuks. So... 20 to 25% of what? the 100K worldwide employees? So you're predicting that 20K to 25K of the total workforce is to be let go?

Also... same ol, same ol... "There are so many 'management' individuals who are in positions for which they know absolutely nothing about." So... the "dead wood" thing again, combined with the "no training" thing. I like how you view the idea of moving people into roles --- and no, they aren't just thrown into roles that they have no concept of (there are no A/P analysts being promoted to head up development teams). What you see are people in Order Handling roles promoted to Contracts leadership roles, Contracts leaders moved over to run A/R teams, etc... If you have any clue at all at how shared services in SAP works you'd see that people are moving within what is defined as the "end to end process" and just not randomly all over the place.

Sorry. I find your analysis to be poorly thought out and exaggerated. There might be layoffs, but not to the degree that you are suggesting... not even close. And while you find some leaders in roles they are ill-equipped for, the vast majority of the leadership roles are filled by competent people who have been adequately prepared for their roles.

Your comment sounds like sour grapes. Look inward... perhaps you're dissatisfaction comes from your own failings. And good luck.. if they are going to let go 20 to 25% of the workforce, there's a chance you might find yourself caught up in the tidal wave....

In my opinion there will need to be a reduction of 20 -25% to begin to make a difference in stock performance.

There are so many "management" individuals who are in positions for which they know absolutely nothing about.

It's an SAP thing where you take people from one area to a completely different area and then promote them to an even higher level so they can then impede and demoralize the teams the allegedly manage.

I have been at SAP for many years and can tell that the culture has changed, for the worse, drastically from what it was in the early 2000's. Most of this change has come from the acquisitions we have made. These acquisitions remained independent and had no interest in becoming "one" company. And for this I blame the SAP Board and Chairman who stuck their head in the sand and was only interested in new potential customers and not building "one culture / one company" - clear there is a lot of resentment from the acquired employees that they were absorbed by SAP, I see it everyday. We have amateurs on our Board.

Musical chair until no more chairs

Yet more change to come to the SAP Board... it's becoming like semi annual musical chairs, every six months somebody else is departing and somebody new is coming in. Whatever happened to continuity?

Your post is spot on.... it's a compelling case.