SAP Seeks to Rein In Costs to Focus on AI Investments

By Mauro Orru

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.

Write to Mauro Orru at mauro.orru@wsj.com

(END) Dow Jones Newswires

July 02, 2026 07:39 ET (11:39 GMT)