SAP Stock Slumps on Falling Employee Trust, Restructuring Frustrations

SAP SE is facing a growing internal crisis as employee trust in its leadership has dropped sharply following a wave of job cuts and organizational restructuring. An internal survey revealed that confidence in the executive board has fallen to 59%, down from 65% in April 2025. The decline highlights increasing dissatisfaction among the company's global workforce of over 100,000 employees according to internal survey results.

The survey, part of SAP's regular Unfiltered Pulse employee engagement initiative, showed further concerns in strategy execution, in this area dropping to 70% from 77% earlier in the year. Employees have raised issues with unclear performance metrics, unstable organizational structures, and limited resources for integrating AI into daily operations according to employee feedback.

SAP's stock has also suffered, falling 12% year-to-date amid uncertainty about the company's direction in artificial intelligence and cloud transformation. The drop in employee morale and stock price raises questions about leadership effectiveness.

Escalating Pressure on SAP Amid Strategic Overhaul

The loss of employee trust comes as SAP continues to restructure its business to focus more on cloud software and AI. In its latest internal communication, Chief Human Resources Officer Gina Vargiu-Breuer acknowledged that the transformation has created pressure and frustration among staff. She said the company remains confident in its strategic direction but admitted that not all steps have resonated well with employees according to internal communications.

Over 38,000 employee comments highlighted specific concerns, including unclear guidance on performance metrics, limited learning time, and a lack of technical resources for AI integration. These issues suggest that SAP's aggressive shift toward AI may be moving too quickly without sufficient support for its workforce according to employee feedback.

The company's struggles are not unique to its internal operations. SAP's external strategy, including its reported $4.5 billion offer for BlackLine, has also drawn scrutiny. Shareholders are now demanding more transparency, with Engaged Capital recently filing a formal request under Delaware law to review BlackLine's board records regarding the deal according to shareholder filings.

Mixed Signals From the Market and Shareholders

While SAP faces internal challenges, the company's AI ambitions appear to be resonating in other parts of the world. A recent report co-authored with Oxford Economics showed that Indian businesses remain highly optimistic about AI, with 93% expecting positive returns within three years according to market analysis. This confidence is supported by significant investments in talent and technology, with India already achieving a 15% average return on AI investments.

SAP's global AI strategy, however, appears to be lagging. The company has seen a sharp drop in employee trust, and its stock price has declined amid uncertainty about how it will integrate AI into its core business. These conflicting signals raise questions about strategic effectiveness.

Engaged Capital, a shareholder with nearly 1.2 million BlackLine shares, has taken a firm stance on the matter. The firm is seeking detailed records from BlackLine's board regarding its handling of the reported SAP offer, including board meetings and communications with the German software giant according to shareholder demands. This move reflects growing shareholder concerns about board transparency and strategic oversight.

Broader Implications for SAP's Future

The internal survey results and shareholder actions signal a broader challenge for SAP as it seeks to maintain momentum in the highly competitive software industry. With its stock down and employee confidence waning, the company will need to demonstrate a clear path forward to regain trust both internally and externally.

SAP's ability to navigate its restructuring and AI transformation will be closely watched by investors and analysts alike. Any further missteps could exacerbate the current uncertainty and potentially impact its position as Europe's most valuable software company. The coming months will be critical in determining whether SAP can stabilize its workforce and reestablish confidence in its leadership.