Red Hat, the software company in Raleigh, has informed employees it will lay off close to 4% of its global workforce, making it the latest major tech firm to reduce its headcount.
In an email to staff Monday morning, Red Hat CEO Matt Hicks called the cuts “a decision our leadership team was truly hoping we could avoid.”
“This decision is now appropriate to ensure Red Hat’s ability to compete in a new environment,” he said.
As of early March, Red Hat employed roughly 2,200 in the Triangle area. The company, which has offices worldwide, declined to tell The News & Observer how the layoffs may impact North Carolina workers.
In his message to staff, Hicks said the cuts “will focus on general and administrative” positions, and not affect positions “directing selling to customers or building out products.”
He said employees in some countries would be notified of layoffs Monday, while others would be told over the course of the current fiscal quarter. Hicks said he would “share details” on the company’s decision during a company meeting Monday.
Entering its 30th year, Red Hat is considered to be the world’s leading open-source software services provider. Its 2019 sale to IBM for $34 billion was among the largest software acquisitions in history. As part of the deal, IBM pledged to respect Red Hat’s neutrality.
Since the acquisition, Red Hat has consistently delivered for its parent company, reporting double-digit revenue increases most quarters. In an earnings release Wednesday, Red Hat’s software revenue was up 8% though IBM’s overall revenue came in lower than analysts anticipated.
The tech sector overall has retracted in recent months, as companies scale back from their rapid pandemic-era hiring sprees. As interest rates have risen, firms like Lenovo, Cisco, and Google have made global staff cuts which affected their Triangle-based employees.
On Monday morning, anonymous comments about the Red Hat layoffs had begun to appear on the online message board TheLayoff.com.
“Red Hat finally joins the rest of tech,” one post read. “9am layoff call today, April 24th 2023. Sorry Red Hat friends.”
This story was produced with financial support from a coalition of partners led by Innovate Raleigh as part of an independent journalism fellowship program. The N&O maintains full editorial control of the work.
This story was originally published April 24, 2023, 9:31 AM.
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