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Red Hat To Lay Off Over 700 Employees: Report (UPDATED)

Posted by Roy Schestowitz on Apr 24, 2023,

updated Apr 30, 2023

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↺ Red Hat HQ

Following parent company IBM announcing thousands of layoffs in 2023, Red Hat CEO Matt Hicks told employees Monday that approximately 4 percent of its global workforce will be laid off.

The Raleigh, N.C.-based open-source software superstar has approximately 19,000 employees across the globe, according to its website, which means around 760 employees will be let go.

“We will reduce the associate base of Red Hat over the next few weeks,” said CEO Matt Hicks in a letter to employees, according to multiple reports. Hicks said the decision is “now appropriate to ensure Red Hat’s ability to compete in a new environment,” adding that his leadership team was “truly hoping” layoffs could be avoided.

Red Hat’s CEO said the layoffs will focus on general and administrative positions, while sales and engineering positions would not be affected. Employees in certain countries will be notified Monday, although others will be told over the course of Red Hat’s current fiscal second quarter.

Read on

↺ Read On: CRN

UPDATE

CEO quoted and positive spin:

Red Hat Layoffs Help Company ‘Compete In a New Environment’

↺ Red Hat Layoffs Help Company ‘Compete In a New Environment’

> Early Monday morning, Matt Hicks, who has served as the company’s president and CEO for less than a year, sent a company-wide email announcing the Red Hat layoffs.

The Register:

IBM pauses counting its billions to trim Red Hat staff

↺ IBM pauses counting its billions to trim Red Hat staff

> In a published note, Hicks said the staff reductions will occur over the next few months.

> "Our reductions will focus on general and administrative and similar roles across all functions and represent a reduction of just under four percent in total," he said. "We will not reduce roles directly selling to customers or building our products."

From Red Hat's site:

Message to Red Hat associates today

↺ Message to Red Hat associates today

> Editor’s note: Earlier today, president and chief executive officer of Red Hat, Matt Hicks, shared the following email with Red Hatters.

Lunduke:

Tech Layoffs Hit Linux: Red Hat Laying Off 760 Employees

↺ Tech Layoffs Hit Linux: Red Hat Laying Off 760 Employees

> CEO of the largest Linux company: "We must continue to sharpen our focus and do fewer things better."

Unions?

Red Hat layoffs prompt calls to unionize, CEO responds • The Register

↺ Red Hat layoffs prompt calls to unionize, CEO responds • The Register

SJVN:

Red Hat's Layoffs

↺ Red Hat's Layoffs

> IBM, Red Hat's parent company, reported stellar gross profit margins in the first quarter of 2023. As for Red Hat, IBM CEO Arvind Krishna said he's "expecting 11% to 13% [growth] for the year." That sounds like good news to me! But, the stock market still seems to think that IBM is a growth stock while it's really been a value stock even after its Red Hat acquisition. Combine that with the current CEO fad of laying off employees for fear of recession, and it comes as no surprise that Red Hat told its staffers that it would reduce its associate base by just under 4% over the next few months.

> This is the first time Red Hat has ever had significant layoffs. The reductions will primarily affect general and administrative roles across all functions, while roles focused on selling to customers and building products will remain intact. However, some Red Hat employees in customer-adjacent areas, such as the Enable Sysadmin group, which oversaw the well-regarded Open Source website, have also been laid off.

> The restructuring process will begin immediately in some countries and continue through the end of the second quarter. With Red Hat's total staff of about 20,000, approximately 800 Red Hatters will be looking for new jobs.

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