SAP to Lay Off One in Seven Employees in Germany - Report

The German software giant SAP is currently undergoing a significant workforce reduction process. According to reports, approximately 3,500 of its 25,000 employees in Germany will be leaving the company. This move is part of SAP's "Next Level Transformation" program, which aims to reduce 9,000 to 10,000 job positions across the entire organization. The company's market performance has been notable; the stock has risen by 75.7% since the beginning of the year, bringing the company's market value to nearly €300 billion. According to InvestingPro data, seven analysts have recently revised their earnings expectations upward, but the report indicates that the mood among employees at headquarters remains one of dissatisfaction and disappointment.

With the termination of severance pay and early retirement programs in Germany on Tuesday, many employees are expected to have signed their termination agreements. The decrease in staff has raised concerns among the remaining workforce about potential workload increases, even as the company maintains a healthy gross profit margin of 72.9%.

SAP's share price is trading around €255.48, near its 52-week high, setting new records. This would typically be a cause for celebration among employees, especially due to the broad financial benefits obtained from the company's extensive employee participation programs. For deeper insights into SAP's valuation and future potential, InvestingPro subscribers can access more than 10 additional exclusive tips and comprehensive financial metrics. However, the current sentiment is overshadowed by the job cuts implemented under Christian Klein's leadership since the beginning of the year.