The voluntary redundancy offers to the SAP workforce are apparently attractive. The restructuring measures announced at the beginning of the year will no longer involve 8,000 positions, but are instead expected to reach 9,000 to 10,000.

This was announced by SAP when it presented its half-year results. „We have deliberately designed the programmes to ensure a high level of acceptance,“ said CFO Dominik Asam in an interview with Börsen-Zeitung. Early retirement and voluntary programmes in the USA and Germany had been „very well received“.

„We can use this to better distribute resources globally, and strengthen ourselves with people whose skills will be particularly in demand in the future,“ explained Asam. He is therefore „very satisfied“ with the development of the programmes. Employees in Germany who have registered for one of the programmes have until the end of September to decide whether they actually want to take advantage of it.

According to the group, there are still no plans to cut jobs beyond what is currently agreed. By hiring in growth areas, such as artificial intelligence, the total number of employees is expected to remain roughly constant compared to the end of 2023. However, the reorganisation will lead to short-term pressures. In the second quarter, SAP recorded additional expenses of over 600 million euros, mainly due to the positive response to the voluntary redundancy programmes. SAP is now estimating restructuring costs totalling 3 billion euros, compared to the original estimate of 2.2 billion euros.

Operating profit fell by 11% year-on-year to 1.2 billion euros in the second quarter as a result of the charges. In the first quarter, SAP had posted an operating loss as a result of the restructuring expenses. On an adjusted basis, however, operating profit (non-IFRS) rose by a third to 1.9 billion euros in the second quarter, exceeding analysts' consensus estimates of 1.8 billion euros. The adjusted non-IFRS key figures are the primary basis for SAP's financial, strategic and operational decisions. Restructuring costs and acquisition-related expenses are not included.

Sales increased by 10% to 8.3 billion euros in the second quarter, driven once again by cloud revenues, which rose by 25% to 4.15 billion euros. The high growth momentum is expected to continue. SAP expects sales revenues of 37.5 billion euros by 2025, of which 21.5 billion euros will be cloud revenues. One driver for this is applications with artificial intelligence, which are being bundled with the cloud business. Customers who are still using software via a licence model for local use (on-premise) will not benefit from these innovations.

„Some on-premise customers are now realising that they are running into a dead end,“ explains Asam. However, the majority of these customers are already using the SAP S4 platform – this reduces the risk of a customer embarking on the journey to the cloud with another software provider. A significant part of the further anticipated growth momentum is traditionally generated towards the end of the year, when a particularly large number of contracts are signed. „The fourth quarter will be decisive in determining whether we achieve the 2025 cloud targets," he said.

The company raised its free cash flow forecast for 2025 to around 8 billion euros in January. This forecast remains unchanged, although SAP now expects restructuring expenses in the mid-triple-digit million euro range for 2025. The positive effects of the transformation are expected to be felt in the operating result (non-IFRS), which is set to rise to 10.2 billion euros, up from 10 billion euros previously.

Internally, however, the restructuring is depressing the overall mood at the company. The index used to measure employee engagement is falling significantly. SAP now expects a result of between 70% and 74% for 2024, where previously 76 to 80% was the target. The goal for 2025 is no longer to „steadily“ increase the index, but only to increase it.

„We want to be able to retain important talent during the transformation,“ Asam emphasises. The offers to leave the company are based on mutual agreement. If an employee registers, SAP can reject this registration if, for example, teams would otherwise be thinned out too much, or specialised skills would be lost. Asam is not too worried that these people might be on the move anyway, and leave SAP at the next opportunity: „We have held detailed discussions with those we don't want to let go – the results were very positive," he says. And it was expected that the employee index commitment would decline. „We have had to initiate many measures that are not popular,“ he admits. „When valued colleagues leave the company during a transformation, it naturally affects the mood.“

SAP is also pushing for a return to the office. As a rule, employees should only work remotely two days a week, with three days back in the office or at a customer's premises. „Not everyone likes that either, but I personally think it's important,“ says Asam.

He admits that management needs to scrutinise itself on another point: „I'm particularly concerned about how we can improve implementation", he says. Surveys have shown that employees are definitely convinced by the SAP strategy – but they are unsure how they can manage to implement all the tasks. „We need to listen more carefully to our employees,“ says Asam. After all, the employees, currently around 105,000 people worldwide, are crucial to the success of the strategy. „We can't just announce the implementation as a Management Board– someone has to do it.“

Applications with artificial intelligence are also an efficiency lever in the SAP organisation. The Group wants to bring around 100 use cases to customers by the end of the year, and SAP itself wants to set a good example. In the finance department, Asam is relying on AI support for the management of contracts: „The contract offers we make to customers are often very individualised,“ explains the CFO. However, the number of contracts is set to increase significantly, especially as SAP is increasingly targeting customers in the SME sector.

SAP wants to double the number of offers over the next three years. „However, processing should work with a constant number of people,“ Asam emphasises. An AI that can also handle unstructured data should help to automate an increasing proportion of this work. This is also an argument useful in discussions with customers, since "we don't just want to advertise the benefits of an application, we also want to use it ourselves.“