[Exclusive] Big Tech Layoff Aftershocks Continue This Year... SAP Korea's First Voluntary Retirement

Aftermath of Headquarters Restructuring... Voluntary Retirement and Job Abolition Concurrently
Big Tech Layoff Storm Continues... Increased Anxiety at Korean Branches

SAP Korea, the Korean branch of SAP, the world's largest enterprise software (SW) company, is conducting its first voluntary retirement program. The restructuring wave that began at the German headquarters has extended to the Korean branch. Following last year, this year also sees a strong trend of layoffs in global big tech companies.

According to the IT industry on the 16th, SAP Korea is accepting applications for voluntary retirement. The headquarters plans to include about 20 employees out of approximately 450 full-time staff in the voluntary retirement scale. While there have been instances of recommended resignations or job abolitions in the past, this is the first time for voluntary retirement.

Considering that voluntary retirement and job abolitions are being conducted simultaneously, the scale of layoffs is expected to increase further. The company plans to complete the related procedures by May.

This voluntary retirement is a result of the headquarters' layoff measures. SAP announced in January that it plans to restructure about 8,000 employees through voluntary departures and other means. This accounts for 7% of the total 108,000 full-time employees. The plan aims to reduce costs and focus on areas such as artificial intelligence (AI).

Last year, SAP also pushed for layoffs of about 3,000 employees. SAP Korea also proceeded with job abolitions. This is an indirect restructuring method that encourages voluntary resignation by eliminating positions. As a result, the scale of layoffs remained in the single digits, but severance pay increased by 37.5% year-on-year to 7.7 billion KRW.

This year, conducting voluntary retirement and job abolitions together is intended to actively reduce the workforce. The scale of restructuring at headquarters has increased, and last year's layoffs through job abolitions did not meet the headquarters' expectations.

Foreign IT companies have faced a wave of layoffs since last year. This is due to the end of the COVID-19 boom and big tech companies experiencing poor performance amid economic recession concerns, leading to large-scale restructuring.

Last year, Google Korea recommended resignation to about 10 employees, approximately 2% of its staff. Microsoft Korea (Korea MS) notified about 20 employees, and Amazon Web Services Korea (AWS Korea) reportedly informed about 5-10% of its total employees of recommended resignation.

The restructuring trend continues into this year. AWS announced it will lay off hundreds of employees in sales and marketing departments, and MS plans to cut 1,900 employees in its gaming division. Google is also conducting layoffs in advertising and YouTube sectors.

Korean branches are closely monitoring the situation. Most lack labor unions, and there is uncertainty about how the headquarters' restructuring will be applied in Korea, creating an uneasy atmosphere. A representative of a foreign IT company expressed concern, saying, "Korean branches will not be free from the headquarters' layoff storm this year either," and added, "The scale of restructuring could be larger than last year."