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German software giant SAP to slash 3,000 jobs

German software giant SAP said Tuesday it would slash around 3,000 jobs as it launches a mammoth cost-cutting programme against a background of stagnant profits.

Published: 29 January 2019 11:13 CET
German software giant SAP to slash 3,000 jobs
The SAP campus in Baden-Württemberg. Photo: DPA

“We are talking about a completely voluntary programme, we expect a number slightly higher than in 2015 of employees” to leave, chief financial officer Luka Mucic said, referring to a past move to cut 2,200 positions as SAP shifted focus to “cloud” computing from traditional software.

Earlier Tuesday the software giant, which is located in Walldorf, Baden-Württemberg, said it would launch a billion-euro restructuring plan after profits stagnated in 2018, while insisting it was on track to grow revenues and earnings this year.

Chief executive Bill McDermott said the departures were necessary to clear the way for SAP to make new bets on growth areas in the software industry.

“We are going to move our people and our focus to the areas SAP needs the most, AI (artificial intelligence), blockchain, internet of things, quantum
computing,” he said.

“We currently have 95,000 people in the company, if we talk in a few years it will be more,” McDermott added.

SAP was selected by Glassdoor as the best place to work in Germany in 2017, due to being a “great employer with many social benefits.”

SAP said it plans to spend between €800 million and €950 million “to further simplify company structures and processes”.

The firm is an industry leader in the comparatively new field of experience management.

Invented in the 1990s, the technique calls for collecting data on customers, employees, brands and products, aiming to sharpen firms' understanding of how they are perceived.

In 2018, SAP continued its transformation away from traditional one-off sales of business software to cloud computing, under which it charges customers a subscription fee to process data on the firm's computers.

Revenue from cloud subscriptions and support grew 32 percent over the year, to almost €3.8 billion.

SEE ALSO: SAP reaches sky high with cloud computing

Meanwhile software licenses and support revenue shrank one percent, although it remains a far bigger source of income for now at almost €15.8 billion.

Across the whole group, SAP aims to increase revenue from its cloud and software activities to between €22.4 and €22.7 billion in 2019.

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TAXES

EXPLAINED: How do you close down a freelance business in Germany?

Leaving the country? Got a steady job offer you can’t say no to? Winding down your self-employment activities in Germany still requires taking a few bureaucratic steps.

Published: 15 May 2024 09:07 CEST
Updated: 15 May 2024 10:57 CEST
EXPLAINED: How do you close down a freelance business in Germany?

Striking out on your own as self-employed is one of the scariest – and potentially most rewarding things – you can do. In Germany, it also comes with its own set of rules around tax and social insurance.

But there are times when – for whatever reason – it may be time to move on.

Whether it’s because you have an exciting new opportunity or things haven’t quite worked out the way you hoped due to economic pressures – winding down self-employment the right way is crucial to avoid gaps in your health and social insurance coverage in Germany.

The steps you have to take are also a bit different depending on if you are new self-employed (Freiberufler) or have a trade licence (Gewerbe) – with some steps not being necessary for new self-employed.

Trade licences are automatically cancelled if the licenced person dies or the company ceases to have financial assets.

Resigning the trade licence or declaring it dormant

New self-employed people like writers or speakers don’t need to go through this step, as they don’t need a trade licence.

Those who have a trade licence will need to contact their competent local authority and resign it, or declare it dormant (withdrawing the licence). If you’re only winding down temporarily, declaring your trade licence dormant instead of de-registering completely may save you a few headaches later.

You may have to do this in person at your local trade office – or Gewerbeamt – depending on whether your local authority allows online de-registration or not. You’ll need to bring your official ID, trade licence, confirmation of registration and possibly an extract from the trade register. Fees are dependent on your local authority and can range from being free to €25.

You can declare the date you intend to resign the licence – which can be in the future. To ensure no gaps in your social insurance protections, including health insurance, set this date for the day before whatever comes next. For example, if you’re starting a new job on January 1st set the date for your trade licence to expire as December 31st.

The trade office will typically notify your local tax office, so you won’t need to do this yourself.

Notifying your tax office

If you’ve had to resign your trade licence, you can skip this step as your trade office will do it for you. If you’re a Freiberufler without a trade licence you need to resign, you’ll have to notify your local Finanzamt, or tax office, yourself.

Luckily, this is a pretty easy step.

First, you need to decide whether you’re ceasing operations completely or wanting to continue them part-time. If you’re ceasing completely, you’ll end up surrendering your self-employed tax number.

You don’t have to do this though. If you think you may still carry on some self-employed business as a side gig, you can inform the tax office that you intend to do so and keep your number.

At that point, the tax office should treat you as a Kleinunternehmer – or a small business making less than €22,000 a year. Having this status means that you will not need to pre-pay taxes or charge VAT on your invoices for freelance side projects.

If you derive any income from your side gig in the future though, you’ll still have to file a tax return.

READ ALSO: Can I have a freelance side gig as an employee in Germany?

Notifying your health insurance

While different private plans in Germany may have different notification requirements, if you have public health insurance in Germany, you should notify them that you’re winding up your self-employed business. Specifically, advise them exactly what date you’re wrapping up.

Again, this should be right before you start your new job or leave the country, to ensure no gaps in your coverage.

If ending your self-employment in Germany, take care to ensure that there’s no gaps in your health insurance coverage, by giving the right date for when you’re ceasing activity. You don’t want to be caught without coverage. Photo by Stephen Andrews on Unsplash

If you are in an artistic profession and thus pay pension, health, and nursing insurance through the Artist Social Insurance Fund (KSK), you should also advise them as well. If you’re leaving self-employment completely, you can typically give notice to KSK as to when it’s ending.

If you’re not, and intend to still make money freelancing as a side gig, they should know this as well. In this event, you’ll no longer pay health or care insurance through KSK, as this is covered through your main job.

You may need to continue to pay pension contributions through KSK based on the amount of money you still make from self-employed activities — depending on how much of them you continue.

KSK: How creative freelancers can pay less for German health insurance

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