John Paczkowski

Recent Posts by John Paczkowski

SAP to Employees: So Long, Farewell, Auf Wiedersehen, Goodbye

Though it reported a 13 percent increase in fourth-quarter profit that was comfortably ahead of market expectations, SAP plans to step up its cost-cutting in the coming year. The German business software provider will sack some 3,000 employees in the months ahead.

“Despite the dramatically deteriorating market conditions since September, we have achieved good results for the entire year,” the company said in a note to employees. “This has only been possible because of the remarkable efforts of all employees, and we would like to express our gratitude to all of you for this. Unlike in past years, which were characterized by double-digit growth rates, the outlook for 2009 is completely different. For this reason, we will have to intensify our cost-savings efforts by implementing additional measures. After an exhaustive and thorough evaluation of all options, we have concluded that a reduction in the number of persons employed is necessary. This is not an easy step for us to take, and we are fully conscious of the implications of this decision….We plan to reduce the number of positions globally from 51,500 to 48,500, taking full advantage of attrition as a factor to reach this goal.”

In sum, thanks for all your hard work, now go clean out your desks.

A grim decision for all involved, but a prudent one considering the company’s somber outlook for the year ahead. “We have arrived in a new world in 2009,” said SAP CEO Henning Kagermann. “The economic crisis will be here to stay for some time.”

[Image credit: Flickr/Daquella Manera]