Dive Brief:
- Red Hat will reduce its workforce by 4%, CEO Matt Hicks said in a Monday blog post. The move will trim roughly 800 positions from the open-source software company’s global workforce of 20,000 associates, a company spokesperson confirmed.
- The reductions will focus on general and administrative roles across all business functions but will exempt direct customer sales and product building, Hicks said.
- IBM, Red Hat’s parent company, laid off 3,900 workers in January. IBM reported Q1 2023 revenue growth of 4.5% year-over-year in constant currency and 0.4% in actual dollars, last week.
Dive Insight:
Red Hat's decision to downsize responds to many of the same factors that led to business realignments throughout the tech sector in recent months.
“At the core of this decision is the need to rebalance where we are investing to enable Red Hat’s future,” Hicks said in the post. “Our investments, including our investments in talent, must be aligned with our strategy.”
Hicks, a veteran of the engineering team that developed the OpenShift platform, was VP of products and technology when the company promoted him to CEO in July. He prioritized a streamlined hybrid cloud strategy at the time of his appointment.
“Our strategy is to deliver open hybrid cloud,” Hicks said in a July blog post. “We must deliver the platforms that enable customer success from on-premises environments to cloud services and at the edge. We will refine our playbook to the simplest possible set of things to deliver in these areas.”
Red Hat hopes to increase agility and rebalance investments supporting technology building and customer support, Hicks said in Monday’s post.
Despite low unemployment among tech workers, more than 600 companies have let go of nearly 175,000 workers to date, according to Layoffs.fyi.
