January 08, 2003, 4:30 PM — Three months after taking over as head of SAP AG's U.S. operations, SAP America Inc. Chief Executive Officer (CEO) Bill McDermott is revamping the company's sales force, a change that prompted layoffs of 132 employees this week.
Previously organized around vertical industry products, SAP's U.S. sales personnel will now have a more regional focus, handling a broader array of products for a more local group of customers, according to company spokesman Jim Dever.
The change is intended to cut out organizational layers and bring SAP's sales team closer to its customers, he said.
As part of the reorganization, 88 positions were eliminated. Another 44 employees were let go from positions that will be redefined and refilled, Dever said. He declined to disclose the total size of SAP's U.S. sales force; however, the cuts represent about 3 percent of its U.S. workforce, he said.
Walldorf, Germany-based SAP maintains U.S. headquarters in Newtown Square, Pennsylvania. The company's SAP America organization, which oversees its business activities in the U.S. and Canada, has been a turbulent one: McDermott is the unit's fourth CEO in three years.
SAP has been struggling with the same grim economic conditions plaguing many software vendors. Citing factors including revenue declines in its Americas operations, SAP in July cut its 2002 financial results forecasts and implemented a hiring freeze.
The company said at the time, though, that it did not anticipate layoffs among its global workforce of about 30,000.
Other competing software vendors have sought to offset sagging revenue with headcount reductions. Siebel Systems Inc. cut 16 percent of its staff in 2002, while Oracle Corp. cut more than 800 employees in trimming 2 percent of its staff.
SAP America also lost 42 customer service staff positions recently, as part of a global organizational decision to transfer jobs to a call center operations facility in Dublin. Those cuts were unrelated to the sales force reorganization, Dever said.