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Red Hat reduces headcount by 800 employeesRed Hat reduces headcount by 800 employees

Raleigh-based open source company Red Hat reduced its workforce by nearly 800 employees on Monday.

Kelsey Kusterer Ziser

April 25, 2023

2 Min Read
Red Hat reduces headcount by 800 employees

Raleigh-based open source company Red Hat reduced its workforce by nearly 800 employees on Monday.

The company has about 2,200 employees in downtown Raleigh, North Carolina, and nearly 19,000 globally. In an email to employees, CEO Matt Hicks said layoffs would be slightly under 4%, according to WRAL TechWire which received a copy of the email.

Figure 1: (Source: Kristoffer Tripplaar/Alamy Stock Photo) (Source: Kristoffer Tripplaar/Alamy Stock Photo)

Hicks was promoted to president and CEO last July, according to Seeking Alpha.

Hicks said layoffs wouldn't impact roles related to direct selling to customers or "building our products." In addition, he said the layoff process would continue through the end of Q2. Hicks added that the workforce reduction would focus on general and administrative (G&A) positions, according to The Register.

"At the core of this decision is the need to rebalance where we are investing to enable Red Hat's future," said Hicks.

A Red Hat spokesperson told The Register that the company wouldn't make a statement beyond Hick's email, and had not responded to Light Reading's request for comment at the time of this writing.

Q1 growth

Red Hat's revenue grew 11% in Q1, according to Seeking Alpha.

IBM CFO James Kavanaugh was bullish about Red Hat's growth during the Q1 financial call last week. "But just wrapping up Red Hat and the discussion I have with investors, taking a big step back, we're pleased overall," he said. "We're four years into this acquisition. We have quadrupled the Red Hat revenue from pre-acquisition in 3.5 years."

IBM acquired Red Hat in 2019 for $34 billion.

"While IBM does not separate Red Hat's results, it has continued to publish Red Hat's sales growth rates ever since completing the acquisition in July 2019," reported Light Reading's Iain Morris last May. "An estimate based on those disclosures is that revenues [in 2021] topped $5.6 billion, nearly twice what Red Hat made in 2017, the year before IBM announced its move. Red Hat appears to have thrived because IBM has left it alone to function as an independent unit."

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About the Author(s)

Kelsey Kusterer Ziser

Editor

Kelsey Kusterer Ziser studied journalism and mass communication with a second major of Spanish at the University of North Carolina at Chapel Hill, but her interest in the telecom world started with a PR position at Connect2 Communications where she worked with a variety of clients focused on communications network infrastructure, including switches, routers, SBCs, data center equipment and systems. There, she witnessed the growing influence of fiber in the industry, as packet optical service delivery platforms transformed network performance and scale.

Her drive for communicating the impact of new technology translated into a communications position at the FREEDM Systems Center, a smart grid research lab at N.C. State University. While at FREEDM, Kelsey orchestrated the center’s webinar program which crossed multiple college campuses and covered research projects like cyber security in the smart grid, the center's smart solid-state transformer, fault isolation devices and distributed energy storage devices. She most recently worked in marketing at a healthcare company and is excited to take on the role of editor for Light Reading's Upskill U website.

Outside the office, she can be found riding her aging Raleigh-brand road bike or dodging snakes on runs through the local Raleigh, N.C., greenways. A glass half-full gal, Kelsey is grateful for the sunning reptiles because they motivate her to improve her timed miles.

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