SAP freezes hiring and travel to shovel cash into AI

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.

Published July 3, 2026 - 2:14 pm UTC

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