Introduction

SAP, the global leader in enterprise resource planning (ERP) solutions, posted strong financial results in 2024. However, the company faced challenges in leadership and organizational restructuring. As SAP moves into 2025, industry analysts are focused on how the company will stabilize its executive team and workforce. Success in the upcoming year will depend on how well SAP handles these challenges and adapts to new opportunities.

The Impact of SAP’s 2024 Restructuring Plans

SAP began 2024 with a major restructuring. Despite strong results for fiscal year 2023, the company announced that 8,000 employees would be impacted by role changes or buyouts. The goal was to refocus SAP’s resources on growth areas, particularly Artificial Intelligence (AI), to address future business needs.

By midyear, SAP expanded the plan to include up to 10,000 employees. Most of these changes would be handled through voluntary leave or retraining programs, and the company expected to end the year with around 105,000 employees.

Leadership Shake-Ups: A Year of Change

Alongside restructuring, SAP experienced several leadership changes. In April, Thomas Saueressig, a long-time executive, shifted from head of product engineering to lead a new customer services and delivery unit. Muhammad Alam, who had overseen SAP’s intelligent spend unit, took over as head of product engineering.

In May, Hasso Plattner, SAP’s co-founder and former CEO, retired, marking the end of an era. The company also saw unexpected departures in the summer. Chief Marketing Officer Julia White and Chief Revenue Officer Scott Russell left by mutual agreement, and their positions were left unfilled. As a result, SAP streamlined its executive board.

In September, Chief Technology Officer Juergen Mueller departed following allegations of inappropriate behavior. CEO Christian Klein assumed the interim CTO role, but the company has yet to name a permanent replacement.

Organizational Disruption: A Challenging Year for SAP

The leadership changes and restructuring caused significant disruption. Joshua Greenbaum, principal at Enterprise Applications Consulting, explained that turnover can create chaos for employees, partners, and customers. SAP’s customers had to adjust to new contacts and leadership frequently, complicating their relationships with the company.

Despite these challenges, Greenbaum noted that SAP managed the situation fairly well. While some changes, such as White’s promotion to the executive board, were less successful, other moves, like integrating marketing under Alam’s leadership in product engineering, were seen as positive.

A Leadership Team in Transition

As SAP enters 2025, its leadership team is still evolving. Holger Mueller, an analyst at Constellation Research, emphasized that the executive board has yet to prove itself. Key positions, such as Chief Revenue Officer (CRO) and Chief Marketing Officer (CMO), remain vacant, creating leadership gaps that need to be filled quickly.

SAP’s collaborative leadership style sets it apart from competitors like Oracle and Salesforce, which are led by more public-facing figures. Jon Reed, an analyst at Diginomica, praised SAP’s “enlightened” approach to customer concerns. However, SAP’s challenge in 2025 will be to ensure that its strategies, particularly those related to cloud migration and customer experience, are clearly communicated and effectively executed.

Will Employee Restructuring Continue in 2025?

Employee restructuring is expected to continue to be a key theme at SAP. While the company has the ability to attract top talent, frequent turnover has caused a loss of institutional knowledge. Greenbaum noted that while shedding old-guard thinking can spark innovation, it can also disrupt strategic planning and relationships with customers and partners.

Reed pointed out that frequent restructuring could hurt employee morale. While some employees may have become stagnant, SAP must rebuild trust within its workforce. If further cutbacks or buyouts occur in 2025, it could damage morale further and make it difficult to restore confidence.

SAP’s Global Role and ESG Commitment

Despite the internal challenges, SAP remains a key player in the global business landscape. The company has been vocal about its commitment to environmental, social, and governance (ESG) issues, as well as promoting diversity in the workplace. These values have become increasingly important as global instability and rising nationalism affect supply chains and economies.

SAP’s proactive stance on ESG gives it an edge, as companies increasingly seek partners who can navigate complex global challenges. SAP’s strong track record in promoting diversity and addressing global issues provides a solid foundation for the future.

Conclusion: Stabilizing for the Future

As SAP enters 2025, it faces a critical period of transition. The leadership changes and restructuring of 2024 present an opportunity for the company to reorganize and refocus on its long-term goals, particularly in AI and customer experience. However, SAP must move quickly to fill leadership gaps, stabilize its workforce, and rebuild internal trust to maintain its competitive advantage.

For SAP’s customers, partners, and employees, 2025 should bring much-needed clarity and stability. While 2024 was a year of uncertainty, SAP’s ability to rebuild its leadership team and fulfill its promises will be key to its continued success.