SAP is the biggest software maker in Europe. The 75,000 person company will likely see a reduction in force as SAP looks to move away from on-premises software sales while refocusing on selling cloud products.
You might remember that SAP has made several headlines over the past 12 months regarding its HANA in-memory database product as well as SAP’s multi-billion dollar acquisition of Concur. As SAP looks to build a name for itself in the cloud, those who worked with on-premises solutions may be asked to take an early retirement or given a severance package, according to reports online.
The 3% reduction in force means that SAP will shed roughly 2,250 jobs. Although these cuts will primarily impact those who work with on-premises solutions, SAP did mention that up to 2,200 positions could be open within its HANA and Concur divisions.
Stefan Reis, the Chief of HR at SAP, said SAP created a similar amount of jobs last year within its cloud divisions. Most of the job cuts seem to be impacting SAP employees who work in France, USA, UK and Germany. These are the employees expected to be asked to take an early retirement. Other European SAP workers will be given the option of taking a voluntary leave instead.
SAP reported several months ago that it would forgo its profit margin targets in order to focus more time, money, effort and energy into its cloud based products. SAP is betting big on putting its business analysis apps in the cloud. Products running on top of HANA in the cloud have seen up to a 40% decrease in overall IT load, according some reports.
SAP Chief Executive Officer Bill McDermott recently said, “2015 is all about accelerating the introduction of next generation applications on Hana and scaling the world’s largest Business Network.”