SAP freezes most travel and hiring as AI costs soar

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SAP, one of the world’s biggest software companies, suspended most travel and hiring last month because of AI’s soaring cost, with exceptions only being made for AI-related travel or hires, according to an internal SAP email obtained by 404 Media.

Bloomberg reported on the email and the freezes in July, but a current SAP employee said the bans are still in effect. The employee said the company had a global employee meeting recently where this was brought up again. They added SAP is currently rolling out a newly created AI tool to the entire company “which I can only imagine massively increases the costs.” 404 Media granted the source anonymity to protect them from retaliation.

The email highlights how companies both big and small are coming to grips with the reality of AI’s cost. Rather than being a massive cost saver, in some cases companies are throttling employees’ AI use as it spirals out of control, and scrambling to find other ways to keep costs down.

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“As AI reshapes the future of our industry, we are making significant investments in the products and AI capabilities we build, complemented by strategic acquisitions in data and AI where we need additional expertise and technology,” the email, sent by SAP leadership to all SAP employees worldwide on July 1, reads. “We are also investing in how we consume AI across SAP, with token usage and related costs increasing as more AI-driven scenarios go live. Taken together, this makes it even more important that we focus our spending on what matters most to future proof SAP.”

As part of this, SAP needs to “be disciplined in how we spend,” the email continues. That includes focusing “ new hiring on selected profiles only [emphasis in original], mainly core AI roles, that are critical for our long-term success.”

The cost cutting measures also include travel. “Going forward, we will put a pause to our internal travel ,” the email continues. “Customer-facing trips and travel that is directly related to our AI development efforts around our ‘All in on AI’ program as well as travel to deliver mission-critical Al trainings for employees will continue.”

The email closes with a paragraph on how “These measures are not about doing less.” Instead, “They are about making deliberate choices: investing where it matters most — in our people, our customers, and the technologies that define the next era of enterprise software — and being careful and responsible in areas where we can save. By balancing where we invest and where we save, we ensure that SAP remains strong, competitive, and well-positioned for the long term.”

SAP did not respond to a request for comment.

404 Media has been reporting on how various companies across all sorts of industries are responding to the climbing cost of AI. Citi, for example , shut off access to certain AI models. Atlassian ended unlimited use of AI tools and introduced a dashboard for employees to track their usage. Adobe decided not to renew unlimited Claude access. Microsoft introduced budget limits for AI and said “tokenmaxxing is not what we are optimizing for.”

In leaked audio , an Accenture employee said they were seeing “soaring token spend.” Accenture was trying to figure out how to stop non-technical workers from blowing through their AI budgets by using AI for trivial tasks like converting PDFs to presentation slides, the audio showed.

In some cases, companies even made Claude and Codex talk like a caveman to limit the tools’ verbose responses and lower costs.