Last week, SAP Labs, the research and development business unit of the German technology company SAP, laid off approximately 300 executives across its Indian centres, with a significant impact on offices in Bengaluru and Gurgaon.
The reason for the layoffs was the closure of a global delivery centre that housed custom development roles for SAP implementation projects, according to sources.
Last month, SAP announced a global focus on its core business, resulting in around 3,000 job cuts. These layoffs followed a 30 per cent increase in revenue for the company’s cloud business during the fourth quarter of 2022.
As part of an organisational re-prioritisation, the company is focusing on providing value to both existing and new customers in high-growth opportunities, particularly in the cloud. The company’s spokesperson acknowledged that the recent layoffs were a difficult decision and expressed concern for the personal impact on affected employees.
The affected employees, including some with 10-15 years of experience, were offered severance packages that included salaries based on their years of service at the company, among other benefits. SAP Labs declined to provide a breakdown of the layoffs specific to India in response to ET’s request for comment.
According to a company spokesperson, SAP is currently undergoing a strategic transformation that began two years ago. One source suggested that the affected employees’ skills may have become outdated, and that many customers are transitioning to the cloud, necessitating new skills on the part of employees.
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