Red Hat To Lay Off Over 700 Employees: Report
‘We will reduce the associate base of Red Hat over the next few weeks,’ said CEO Matt Hicks in a letter to employees Monday.
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 20,000 employees across the globe, according to its website, which means upwards of 800 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.
[Related: AWS Confirms Layoffs Impacting ‘Single Digit Percentage’ Of Employees]
Red Hat did not respond to CRN’s request for comment on the matter by press time.
IBM-Red Hat Layoffs
In one of the largest tech acquisitions in history, IBM acquired Red Hat in 2019 for $34 billion. As part of the blockbuster merger, IBM pledged to respect Red Hat’s neutrality.
Earlier this year, IBM confirmed it planned to lay off between 1 percent and 1.5 percent of its global 260,000 workforce. This means around 3,900 employees will be let go.
IBM told CRN at the time that the layoffs are related to the Kyndryl spinoff and health-care divestiture and not based on 2022 performance or 2023 expectations.
Matt Hicks was appointed CEO of Red Hat in July 2022.
Tech Layoffs 2023
Red Hat is hardly the first technology company to lay off employees in 2023.
From Amazon Web Services and Microsoft to SADA and CDW, IT companies of all shapes and sizes are laying off hundreds, sometimes thousands of employees.
Many CEOs are citing hiring too many employees during 2021 and 2022 as demand for IT solutions exploded during the COVID-19 pandemic as a main reason for letting employees go now.
“Everyone just kept hiring, hiring and hiring, whether it made any sense or not. There was no downside to it. And all anyone cared about was growth at any cost,” said Aviatrix CEO Steve Mullaney in a recent interview with CRN. “Then last summer hits. All of a sudden everybody then says, ‘Well now, hang on. That’s not the way the world works anymore. You actually have to be profitable.’ It’s going back to what’s normal.”