Europe’s biggest software company, SAP, has announced new cost-control measures. This includes restricting hiring and pausing certain internal travel. These limitations come as the company redirects resources toward artificial intelligence (AI) development. In an internal email reviewed by Bloomberg, SAP’s executive board notified employees that going forward, the company will “exclusively focus new hiring on selected profiles only, mainly core AI roles, that are critical for our long-term success.” The company also said that internal travel unrelated to AI development will be frozen, and supplier spending will be reviewed for potential savings.“As AI reshapes the future of our industry, we are making significant investments in the products and AI capabilities we build, complemented by strategic acquisitions in data and AI where we need additional expertise and technology. By balancing where we invest and where we save, we ensure that SAP remains strong, competitive, and well-positioned for the long term,” the company’s email added.
How SAP is planning to reduce spending to prioritise AI hiring
The latest measures follow a broader restructuring led by SAP CEO Christian Klein, who has been increasing the company’s focus on AI. Earlier this week, SAP announced changes to its leadership structure, giving greater responsibility for AI development to Klein and the company’s operating chief. The company has also made acquisitions aimed at strengthening its AI capabilities.SAP recently lost out in its attempt to acquire industrial AI and data company Cognite, which instead agreed to a $3.1 billion deal with Schneider Electric.A company spokesperson told Bloomberg that SAP regularly reviews its investments to focus on customer value and innovation. The spokesperson added that customer-facing activities and critical AI initiatives will continue without disruption.The latest spending restrictions come after SAP completed a restructuring programme last year that cost more than €3 billion (nearly $3.4 billion) and resulted in the elimination of around 10,000 jobs. SAP CFO Dominik Asam had also said the company planned to continue reducing its workforce by 1% to 2% annually.SAP’s latest measures reflect a wider trend across the software industry, where companies including Salesforce, Workday and Microsoft have announced workforce reductions over the past two years while increasing investments in AI and implementing cost-saving initiatives.