SAP Canada confirms layoffs in Ontario, Quebec, and B.C.

SAP Canada is laying off more than 79 employees in Ontario, B.C., and Quebec as part of a global restructuring effort, SAP confirmed with IT World Canada.

SAP Canada says its Ontario offices will see 64 layoffs and its Quebec offices will see 15 layoffs. The restructuring will also impact sites in British Columbia, but no numbers were shared for that region.

A source familiar with the matter tells IT World Canada the Ontario layoffs specifically affect SAP Labs locations in east Toronto and in Waterloo, Ont. will see 64 combined layoffs. The Montreal Labs location will see another 15 layoffs. SAP’s Labs locations are where R&D work is done on its core products – enterprise resource planning software used by many Canadian enterprises and governments.

The Canada layoffs come as the Waldorf, Germany-based SAP AG headquarters follows through on a $1.4 billion restructuring plan announced in January. On social media, SAP employees from around the world reported getting their pink slips using the hashtag #SAPlayoffs. In the most recent earnings call with analysts, SAP CEO Bill McDermott said layoffs would come in the form of early retirement for some workers. The restructuring is necessary, he says, to allow SAP to reinvest in the talent it needs to grow its cloud offerings. SAP forecasts savings of up to $1.28 billion per year starting in 2020 as a result of the layoffs.

Globally, SAP anticipates 4,400 employees will leave the firm as part of the restructuring, a spokesperson tells IT World Canada. It plans to give those employees first priority when hiring for new jobs that are created. The restructuring won’t result in an overall reduction in SAP’s headcount, and it plans to grow more than 100,000 colleagues worldwide in 2019. In Canada, SAP estimates its total headcount at 3,400 employees. A 2017 breakdown on its Ontario Labs locations shows 219 workers in Waterloo and 235 in Toronto.

“The restructure will allow us to invest in key growth areas while implementing required changes in other areas to ensure they are prepared for the future,” SAP’s statement reads.

SAP layoffs target legacy software products

That lines up with the layoffs in Canada, according to IT World Canada’s unnamed source. Most are workers older than 40 and focused on SAP’s legacy on-premises software products. There is still demand for those products in Canada, as they remain popular in particular with the public sector.

Just last week at the Activate Digital conference in Mississauga, Ont., Toronto Hydro CIO Rob Wong spoke with IT World Canada about a recently completed a migration to SAP’s ERP.

“In Canada, SAP is by far the leading ERP system for utilities across the country,” he said. “It’s a good fit for our industry.”

Last October, SAP Canada opened a new headquarters in downtown Toronto. The 58,000-square-foot location would consolidate its Labs locations and customer operations. It said it’s committed to investing $550 million into its Canadian presence annually.

During an office tour of its new headquarters in November, Danny Ortchanian, SAP Canada’s national vice-president of sales, said the firm was hiring. At time of publication, a search on the SAP jobs board for Canada reveals 96 positions open to applicants. Of those, 22 are described as intern positions and 30 as sales.

Opportunities await those affected by layoffs

SAP Canada employees that find themselves unemployed have support from the Americas’ SAP User Group (ASUG) Ontario chapter, says Mark Richardson, chief technology officer at Rich Analytics and the communications chair of ASUG Ontario.

“The member companies of ASUG consider ourselves lucky to be able to hire these experienced workers directly out of their roles at SAP Labs,” he says. “They know the guts of the SAP systems they use.”

Members of the ASUG in Ontario include Loblaws, Spinmaster, Maple Leaf Foods, and Imax, just to name a few.

Richardson says that he and Kevin Riddell, the ASUG Ontario chapter chair, are putting together a “speed dating” style event where member companies can meet SAP employees recently laid off. There’s a tentative date set for April 5 in the afternoon. IT World Canada will have updates on the event as they are finalized.

See the office tour of SAP’s new headquarters below:

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Brian Jackson
Brian Jackson
Former editorial director of IT World Canada. Current research director at Info-Tech

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