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 as Europe’s largest software company experiences a 33% drop this year, raising investor concerns that AI will impact demand for its core products.
July 3, 2026 – 2:14 pm
Europe’s biggest software company is tightening its belt to pursue artificial intelligence. SAP is implementing these measures:
- “Exclusively focus new hiring on selected profiles only, mainly core AI roles.”
- Pause internal travel unrelated to AI development.
- Squeeze spending with suppliers.
The logic, as stated by the executive board, is a simple trade-off:
“As AI reshapes the future of our industry, we are making significant investments. 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 emphasized that customer-facing work and critical AI projects remain fully funded.
SAP is not alone in this strategy. Rivals offering subscription software have been cutting costs for two years. Oracle is shedding tens of thousands of jobs to pay for AI data centers, while Salesforce and Microsoft also face similar pressures, redirecting payrolls towards AI budgets.
CEO Christian Klein has been pushing SAP towards AI throughout the year, with this week marking 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, featuring tools like Joule Studio for building AI agents.
The share price reflects these efforts, dropping approximately 33% this year due to fears that AI will impact demand for traditional software. The news prompted a slight dip in SAP stock, falling as much as 2.2% in Frankfurt before recovering.
Some of the AI budget is allocated towards acquisitions, but SAP has not always been successful; this week, it lost out on Cognite, an industrial-AI and data firm, which agreed a $3.1bn deal with Schneider Electric instead.
This recent freeze builds upon prior cost-cutting measures, including a €3bn restructuring that resulted in 10,000 job cuts last year. The finance chief has indicated continued annual trimming of 1 to 2% of staff.
However, the question arises: is the AI investment worth it yet? Some customers and partners have expressed skepticism regarding the value proposition of SAP’s early AI tools, as most Fortune 500 companies are still migrating their systems from on-premise servers to the cloud—a slow and costly process.