The open-source solution provider Red Hat, which is owned by IBM, is the most recent information technology company to announce layoffs. The corporation plans to let go of about 4 percent of its personnel around the world, which is approximately 760 employees.
The software corporation with headquarters in North Carolina has approximately 19,000 employees located in different countries across the world.
According to reports, Red Hat CEO Matt Hicks sent an email to staff informing them of the forthcoming layoffs. Hicks, the CEO of Red Hat, referred to the layoffs in an email as “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 added. “This decision will ensure Red Hat’s ability to compete in a new environment.”
According to Hicks, the reductions “will focus on general and administrative” positions, but they will not effect positions “directing selling to customers or building out products.” He went on to say that employees in some countries would be informed of layoffs on Monday (April 24), while employees in other countries would be informed at various points throughout the current financial quarter.
One of IBM’s most significant software acquisitions in its long and illustrious history
One of the largest software purchases in the history of the world took place in the year 2019, when IBM paid roughly $34 billion to acquire Red Hat. As a condition of the agreement, IBM made a commitment to uphold Red Hat’s status as an impartial party.
In the beginning of this year, IBM made the announcement that it planned to let go of approximately 3,900 individuals out of its total staff of 260,000. The IT infrastructure services provider Kyndryl company and a portion of the artificial intelligence division known as ‘Watson Health’ were both spun off, which resulted in IBM laying off employees.
IBM misses sales projections
Recently, IBM failed to meet the expectations of Wall Street for first-quarter revenue. The company was hampered in this endeavor by declining corporate spending on IT services as well as a strong dollar. The company has lowered its prediction for the full-year growth of its consulting revenue to between six and eight percent, down from an earlier expectation of high single-digit percentage growth.
According to comments made by the Chief Financial Officer James Kavanaugh to Reuters on the state of the American market, “we are seeing softness in certain components of our discretionary based offerings in consulting.”
IBM’s software and consulting business segments contribute more than 75% of the company’s total revenue, and the company reported that its consulting revenue increased by 8.2% at constant currency to $4.96 billion in the quarter that ended on March 31. Revenue from software had a roughly 6% increase.