SAP freezes hiring and travel to fund massive AI investments amid industry transformation

SAP snaps wallet shut for travel and hiring so it can keep shoveling cash into AI

Enterprise software giant confirms it's 'applying discipline' when it comes to hiring and business trips as tries to keep pace SAP is cutting hiring and business travel to boost its investment in AI amid intensifying competition in the enterprise application market. According to an internal email, SAP is set to "exclusively focus new hiring on selected profiles only, mainly core AI roles, that are critical for our long-term success." The missive, seen by Bloomberg, said travel unrelated to AI development would also be put on hold. The German software giant will also seek to cut spending with suppliers. In a statement, an SAP spokesperson told The Register: "SAP continually reviews its investments to ensure resources are focused on the areas that will drive long-term customer value and innovation. As part of this approach, we are prioritizing investments in AI-related capabilities, talent, and technologies while applying greater discipline to hiring, external spending, and internal travel. Customer-facing activities and critical AI initiatives remain fully supported." In May, SAP introduced the Autonomous Enterprise concept, backed by a new SAP Business AI Platform for building and deploying enterprise AI grounded in "real business context" from its ERP, CRM, and HCM applications, and elsewhere in the enterprise. New products include Joule Studio 2.0, which helps developers create and manage AI agents. Agents created in Joule Studio will natively support Model Context Protocol and Agent2Agent to improve interoperability among AI agents, tools, and data sources. This allows SAP to connect and collaborate with third-party tools and agents. Other features, such as agentic orchestration, are also designed to run across hybrid IT environments, while real-time data ingestion supports "context-aware processes" across SAP and third-party systems. However, its big push for AI relevance comes despite SAP missing its earlier self-imposed targets to get users to the cloud and SaaS. In 2022, then-CFO Luka Mucic told investors that SAP expected support revenue to fall to €8.5 billion by 2025, down from around €11.5 billion in 2021, as users move from on-prem licenses and support to cloud subscriptions. But the 2025 full-year figure for on-prem software support is €10.5 billion, down 7 percent from 2024's €11.29 billion and €2 billion off SAP's target. ®

SAP freezes hiring and travel to fund its AI push

SAP has told staff it will freeze most hiring, halt non-essential travel and cut supplier spending to fund a "significant" AI push. The memo lands with Europe's largest software company down about 33 per cent this year, as investors worry AI will erode demand for its core products. Europe's biggest software company is tightening its belt to chase artificial intelligence. SAP is freezing most hiring and pausing non-essential travel, all to free up cash for its AI push. The plan landed in an internal email to staff on Wednesday evening. Bloomberg saw the memo, and SAP confirmed the move to The Register. Going forward, the company will "exclusively focus new hiring on selected profiles only, mainly core AI roles." Internal travel unrelated to AI development is on hold. The German giant will also squeeze spending with suppliers. Save here, spend there The logic is a straight trade-off. "As AI reshapes the future of our industry, we are making significant investments," the executive board wrote. "By balancing where we invest and where we save, we ensure that SAP remains strong, competitive, and well-positioned for the long term." A spokesperson stressed that customer-facing work and critical AI projects stay fully funded. SAP is not alone in the squeeze. Rivals that sell software subscriptions have been cutting for two years. Oracle is shedding tens of thousands of jobs to pay for AI data centres. Salesforce faces the same pressure, and Microsoft has dressed up buyouts as benefits. The pattern is the same everywhere: turn payroll into AI budget. A company reorganising around AI CEO Christian Klein has spent the year bending SAP towards AI. This week brought the second top-level shake-up of 2026, handing more AI oversight to Klein and his operating chief. In May, SAP unveiled its "Autonomous Enterprise" concept and a Business AI Platform, with tools such as Joule Studio for building AI agents. The urgency shows in the share price. SAP stock has fallen about 33 per cent this year, on fears that AI will eat into demand for its traditional software. The shares slipped again on the news, down as much as 2.2 per cent in Frankfurt before recovering. The deals it cannot always win Some of the AI budget goes on acquisitions. But SAP does not always land its target. This week it lost out on Cognite, an industrial-AI and data firm, which agreed a $3.1bn deal with Schneider Electric instead. For a company trying to buy in expertise fast, a near-miss like that stings. There is history here too. Last year SAP finished a restructuring that cost more than €3bn and cut 10,000 jobs. Its finance chief has said the company will keep trimming 1 to 2 per cent of staff a year. The new freeze layers fresh caution on top of that. The customer question The awkward part is whether the AI is worth it yet. Some customers and partners have questioned the value for money of SAP's early AI tools. More than 90 per cent of the Fortune 500 run SAP, and most are still hauling their systems from on-premise servers into the cloud. That migration is slow and costly. It competes for the very budgets SAP now wants spent on AI. For Europe's software champion, the bet is clear. The proof is not in yet.

SAP Hiring Less as It Focuses on Core AI Jobs | PYMNTS.com

The software company will "exclusively focus new hiring on selected profiles only, mainly core Al roles, that are critical for our long-term success," according to a message from its board viewed by Bloomberg News and included in a Thursday (July 2) report. Internal travel not connected to artificial intelligence (AI) development will be put on hold, and the company will seek ways to reduce spending with suppliers. "As Al reshapes the future of our industry, we are making significant investments in the products and Al capabilities we build, complemented by strategic acquisitions in data and Al where we need additional expertise and technology," the message said. "By balancing where we invest and where we save, we ensure that SAP remains strong, competitive, and well-positioned for the long term." The report adds that SAP CEO Christian Klein is reorganizing the company around AI, with a more hands-on role in management as investors move away from legacy software companies. Earlier this week, Bloomberg said, the company undertook its second top-level shakeup of the year, giving more responsibilities around AI development to Klein and his operating chief. SAP has also made several acquisitions to improve its AI capabilities, the report added. In other SAP news, PYMNTS wrote in May about the company's new rules about API access in the context of wider AI adoption. Although policies like this aren't new, what is new is the amount of scrutiny they face. "Customers and user groups argue that the latest iteration of API rules introduces uncertainty around what constitutes permissible use, particularly when APIs are leveraged for AI training, automation or cross-platform data orchestration," PYMNTS wrote. "In the pre-AI era, ambiguity-driven delays might have been absorbed into normal enterprise timelines. Today, they can carry competitive consequences." Research from the PYMNTS Intelligence report "Smart Spending: How AI Is Transforming Financial Decision Making" shows that more than 8 in 10 chief financial officers at large companies are either already using AI or considering adopting it. And as FIS Head of Product Management, Payment Networks Mladen Vladic wrote in a new PYMNTS eBook, "AI Runs Payments. Governance Decides What Happens Next," integration is critical to making sure AI governance is effective. "Unlike traditional enterprise applications, AI systems are inherently integrative," PYMNTS wrote. "They require access to multiple data sources, often in real time, and they derive value from connecting previously siloed systems. In this context, APIs are not optional but foundational."

SAP Seeks to Rein In Costs to Focus on AI Investments

SAP said it would exercise greater discipline when it comes to hiring and travel expenses so it can forge ahead with investments in artificial intelligence, part of efforts from the German business-software group to rein in costs and focus on a technology that is reshaping the industry. The company behind the Concur travel and expense-management platform has been an early adopter of AI, a technology that Chief Executive Christian Klein said could help make employees more productive by reducing repetitive tasks and, at the same time, assist clients with data analysis and automating processes across finance, human-capital management, procurement and other business functions. While SAP embarked on a restructuring program affecting thousands of positions in 2024, the company is now seeking to avoid layoffs and instead redeploy workers in roles where they can make better use of AI to boost productivity. The company said it was constantly revising its spending priorities so it can better focus on AI and the expected return on investment. "As part of this approach, we are prioritizing investments in AI-related capabilities, talent, and technologies while applying greater discipline to hiring, external spending, and internal travel. Customer-facing activities and critical AI initiatives remain fully supported," a company spokesman said in a statement. The announcement comes less than two months after SAP said it was rolling out a new software suite bringing its data, cloud, AI and automation features under one roof, in an effort to stay on top of a technology that cast doubt on the sustainability of the software industry. Rapid advancements in AI have rattled the industry in recent months as some investors questioned whether the technology could one day replace the services for which software-as-a-service, or SaaS, companies charge clients. Major software stocks shed a big chunk of their value earlier this year in a market rout dubbed the 'Saaspocalypse'. SAP shares are down over 30% since the year began. Still, the industry got a small boost last month after Nvidia Chief Executive Jensen Huang said AI agents--which allow users to delegate tasks to AI and let the technology complete them autonomously--had the potential to significantly boost software companies, brushing aside fears that the technology could force many to go out of business.

SAP taps the brakes on spending to fund its AI overhaul

About a year and a half ago, SAP announced a broader restructuring aimed at getting the company ready for the AI era. Among other measures, thousands of jobs were put under review. Roles are being eliminated in slow-growth or shrinking areas, while new teams are being built in future-oriented lines of business. CEO Christian Klein is putting a sharper focus on AI. The rise of ChatGPT and its peers is putting traditional enterprise software providers under pressure worldwide. Investors worry that companies could use AI models to custom-build low-cost programs for accounting or warehouse management. Klein has repeatedly dismissed those concerns. "We are not losing contracts because of AI. We are winning contracts because of AI," he has emphasized more than once. (Reporting by Hakan Ersen. Edited by Olaf Brenner. For questions, please contact our editorial team at [email protected] (for politics and economic affairs) or [email protected] (for companies and markets).)