At its headquarters in Walldorf, Germany, SAP, Europe’s largest software company by market value, is pursuing a strategy to leverage artificial intelligence (AI) technologies to reshape its workforce rather than significantly reduce it. The company acknowledges that AI has supplanted many routine tasks traditionally performed by software engineers. However, rather than widespread layoffs, SAP aims to transition employees into new roles that focus on managing and collaborating with AI tools.
Fabrizio Primerano, a software engineer at SAP, described how AI now handles brainstorming, competitor research, coding, and testing, allowing him to focus more on creative and supervisory responsibilities with AI agents. This shift aligns with SAP’s leadership vision to transform the nature of work within the company. CEO Christian Klein said he does not expect a smaller workforce in the future but anticipates a “very, very different” one that adapts to AI capabilities.
Two years ago, SAP undertook a restructuring effort that resulted in nearly 10,000 job cuts, some attributed to AI-related automation, though the company has not disclosed specific figures. Still, since 2023, SAP reports a net gain of more than 3,500 jobs, including positions such as “forward-deployed engineers” who work directly with customers to develop AI-driven solutions. This approach, company officials argue, is intended to create value from technological advances rather than merely cutting costs.
Economic experts view SAP’s model as a potentially valuable example for Europe, a region confronting demographic challenges and a shortage of skilled labor. Nicola Fuchs-Schündeln, an economist and president of the WZB Berlin Social Science Center, suggested AI could mitigate severe labor shortages brought on by Europe’s aging population. However, the broader adoption of such strategies faces obstacles. Marcel Fratzscher, president of the German Institute for Economic Research, noted that Europe’s lag in digital infrastructure and skills acquisition could hinder its ability to fully replicate SAP’s model without significant investment. He also highlighted Europe’s dependence on AI technologies developed in the United States and China.
SAP’s reliance on American AI platforms has introduced geopolitical risks. The previous U.S. administration’s restrictions on foreign access to certain AI models temporarily alarmed SAP and its clients before those measures were lifted. Industry observers have cautioned that such dependencies could leave SAP vulnerable amid shifting global trade and technology policies.
Market confidence in SAP’s AI-driven future remains wary. Despite rising revenues and profits, the company’s stock has declined almost 50% over the past year, reflecting investor concerns about AI’s impact on SAP’s core software business. Some firms in the financial technology sector have embraced AI advances by reducing personnel, raising questions about whether SAP’s emphasis on workforce transformation can deliver durable competitive advantages.
On the ground, SAP integrates AI into practical applications ranging from patent filing and customer support to automating factory operations and software development. Demonstration centers at the Walldorf campus showcase AI’s potential to preserve institutional knowledge, optimize manufacturing processes, and enhance productivity.
Looking ahead, Klein expressed uncertainty about future career advice for young people, including his own son. Whereas software engineering was once a clear path, he now envisions professions oriented toward direct customer interaction, augmented by AI tools, as the most promising. SAP’s ongoing campus expansion signals confidence in a workforce that evolves alongside AI, rather than being replaced by it.