RALEIGH – Red Hat is cutting hundreds of jobs in a series of layoffs, Chief Executive Officer Matt Hicks has told employees in an email.

A copy of the email was shared with WRAL News.

Red Hat has some 2,200 employees based at its headquarters in downtown Raleigh and some 19,000 worldwide.

The software giant is owned by IBM, which recently announced the layoff of some 3,900 workers but that count has climbed to 5,000, according to Chairman and CEO Arvind Krishna. He also noted that over the last several months IBM has hired around 7,000 people. IBM spinoff Kyndryl also has made layoffs recently.

Red Hat is the second large tech firm in the Triangle to cut jobs within the past week, the other being Lenovo. How many workers losing their jobs was not made clear.

The layoffs also come as the task of finding an information technology-related job is becoming more difficult in North Carolina with advertised openings at record lows in the N.C. Tech Association’s latest IT Job Trends report. Tech sector layoffs in the Triangle also have hit Cisco and Google. Apple is one of the few firms to not make layoffs among tech workers.

Reductions in headcount have come in part as a result of economic recovery from the COVID pandemic and less need for services such as Zoom for videoconferencing. Tech companies also bulked up to the point of overstaffing and now are correcting, according to N.C. State economist Dr. Mike Walden. Walden also sees other changes coming as exemplified in the Red Hat CEO’s letter.

“Many businesses have been coping with the emerging attitudes of workers – particularly young workers – about the work-life balance.  As the economy rapidly expanded after the pandemic and a labor shortage emerged, companies accommodated the new attitudes in order to attract workers,” Walden told WRAL. “Now that he labor shortage has narrowed – indeed, as many firms have released workers – companies no longer need to be as accommodating.  Plus, with revenue forecasts reduced, companies are looking for ways to achieve greater efficiencies.   Often this requires more rules and supervision.  The question is, once we move beyond the current economic challenge and back to substantial growth sometime in 2024, will the pullback on accommodating workers end or continue?”

Job cuts also follow closely on news IBM reported last week that Red Hat quarterly revenues had increased 8%. However, that was far below recent performances. “Red Hat had been averaging at least a 15% revenue growth, every quarter since IBM purchased it in 2019,” noted financial news site Seeking Alpha.

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Hicks was named CEO on Red Hat last July.

“We will reduce the associate base of Red Hat over the next few weeks,” Hicks wrote in the email. He said the layoffs would be “just under 4% in total.”

However, layoffs are off limits in some areas.

“We will not reduce roles directly selling to customers or building our products,” Hicks wrote.

“Notifications will begin today in some countries, and the process will continue through the end of Q2,” he added.

In a statement, Red Hat shared a copy of Hicks’ letter and added: “Red Hat does not plan to comment on today’s news beyond Matt’s email.”

Severance packages for workers vary by country but Hicks said many affected by the cuts will receive include between three and six months pay, bonuses due for the first quarter and prorated for quarter two, and up to six months of career transition services.

Red Hat joins a growing list of tech employers who have cut jobs so far this year. Nearly 610 companies have slashed 173,880 jobs, according to Layoffs.fyi, a site focused on the tech sector.

According to Hicks, the job cuts were necessary for the Hatters’ collective future.

“At the core of this decision is the need to rebalance where we are investing to enable Red Hat’s future,” he said.