Cloud Shakeup at SAP Leads to Restructuring

SAP recently axed their top cloud chief Shawn Price earlier this week. It seems as if SAP is looking to restructure its entire business and focus more on cloud. Reports suggest that SAP plans on cutting 1,500 to 2,500 jobs.  SAP currently employees over 65,000 people internationally. Not too much has been released from SAP in regards to the proposed job cuts. In a brief press release, SAP said, “Our goal is to become simpler, more agile, faster and easier to work with. This is a broad company-wide effort to make SAP more effective and strengthen our innovation leadership.”

Although the news of job cuts at SAP is certainly a shock at face value, SAP mentions that it plans on ending the year with more employees than it began 2014 with. Those in the media who have reached out to SAP have received this response in regards to SAPs shift to the cloud: “This initiative is about simplifying SAP for the customer, not about job cuts. 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.”

As the dust begins to settle in regards to the leadership shake up at SAP, top analysts believe that this move is for the best as SAP tries to move forward in the new cloud-centric world of technology. SAP products and cloud should play nicely together. According to previous reports on CloudWedge, it seems as if SAP has been moving more slowly into the cloud than other vendors in its category. Perhaps cloud startups that have been utilizing cloud more effectively has begun cutting into SAP’s client base? Whatever the reason, SAP has realized the need to move more rapidly into cloud or the lush profit margins that the company has enjoyed for long will simply disappear.