[woodpanel]

In Short: Lidl’s legal team messed that one up.

In defense of ... well actually I don’t know whom I defending here, but what is undereported by German media in this case is “Scheinselbständigkeit”. The remainder of the story then fits the common narrative that developers share about SAP (look, enterprise software in action) and consultants (all overpaid underperformers).

“Scheinselbständigkeit” is a legal term, translatable as “fake entrepreneurialism” and a common problem for German IT freelancers and contractors because it basically states, that you aren’t a freelancer if you serve one client exclusively for more than 6 consecutive months. This could result in huge fines for you but more likely your client as you become retroactively an employee of your client which in turn must pay social security for the years you served him.

It is still a vague term though and in result causes a giant legal grey area, which in turn results in each sector copying what its dominant company’s legal team declared.

For Lidl this means that in the middle of this project, they just happened to fire all of the freelancers.

You can imagine the impact: the most capable and experienced developers had to be replaced with inexperienced freshmen or stuff had to be outsourced to agencies staffed with inexperienced freshmen.

[acdha]

Any idea how much the savings was that they risked a 500M write-off to avoid?

[woodpanel]

Nope, but from what I hear the systems are old, organically grown complex systems (see other commenters here that worked for/with SAP and shared their story). I doubt Lidl can quit on SAP altogether, it's rather the question of how to achieve the business goals with SAP in use.

[acdha]

Seems like all the more reason to hire a couple more employees than trying to save an infinitesimal amount playing games to pretend that they’re contractors

[woodpanel]

Why should freelancers be forced to become employees? And how is Lidl supposed to find suitable candidates, if - as I said - the most capable and suitable ones, are freelancers?

[acdha]

Who said anything about forcing anyone? The problem described was LIDL sacking a bunch of people who had worked exclusively for them for 6 months and presumably would have been happy to continue doing so, except that LIDL would have had to pay a little more tax.

Also, if you can’t find people to hire for a mission critical system, that’s a strong sign that you either need to not make it critical or start aggressively investing in training — which is still considerably cheaper than a 500M write-off.