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SAP cutting unspecified number of jobs in workforce restructuring

SAP cutting unspecified number of jobs in workforce restructuring

SAP will ultimately add more jobs by the end of this year, according to a spokesman

Bill McDermott at Sapphire 2013

Bill McDermott at Sapphire 2013

SAP is trimming an unspecified number of workers as part of an effort to restructure its overall skill set.

Company spokesperson, Andy Kendzie, declined to specify the number of cuts, which come shortly before SAP's major annual Sapphire Now conference, and just after a series of high-profile executive changes that included the departure of development chief Vishal Sikka.

Kendzie characterized the personnel reductions as a strategic move, not a purely cost-cutting measure.

"Our goal is to become simpler, more agile, faster and easier to work with," he said in a statement. "This is a broad company-wide effort to make SAP more effective and strengthen our innovation leadership."

"This initiative is about simplifying SAP for the customer, not about job cuts," Kendzie added. "In fact, our plan is that we will have more employees at the end of 2014 than at the beginning of the year. While we cannot avoid restructuring efforts in certain areas, we will continue to invest in our innovation leadership and become the cloud company."

SAP announced a plan to lay off 3,000 workers in 2009, but since then added significantly to its headcount through acquisitions such as Sybase, SuccessFactors and Ariba. The company had more than 66,000 employees at the end of 2013, according to its most recent annual report.

The current job cuts come as SAP prepares to name Bill McDermott its sole CEO, as co-CEO Jim Hagemann Snabe takes a seat on the company's supervisory board.

After Sikka's abrupt departure earlier this month, SAP also parted ways with its head of cloud software sales, Shawn Price, and reworked the executive structure of its Americas division.

SAP's cloud software revenue is growing quickly, but remains a small part of its overall business. The vendor has also seen sales of on-premises software licenses fall of late.

Meanwhile, Sapphire Now is set to kick off June 3 in Orlando. The event provides SAP with its biggest platform to discuss product road maps and its broad strategic vision.

"With so much change going on before Sapphire Now, customers and partners are wondering what else is ahead for the event," said analyst Ray Wang, founder and chairman of Constellation Research.

Hopefully, SAP's reorganization efforts will settle down "and the company will focus on the most important thing -- meeting its customer's needs," Wang said.

Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris' email address is Chris_Kanaracus@idg.com

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Tags business issuesCustomer Relationship Managementapplicationslayoffsenterprise resource planningit strategySAPsoftwareIT managementinvestmentsMergers and acquisitionspersonnel

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