As IBM Freezes Hiring In Favor of AI, Its Revenue-Driving Software Company Red Hat is Eliminating 760 Jobs

IBM subsidiary Red Hat is laying off nearly 4% of its staff, joining Microsoft, Salesforce, Meta, and other tech companies — including its parent company — that have trimmed their workforces since the end of 2022. The North Carolina-based open-source software company is letting go of 760 employees, ensuring its “ability to compete in a new environment,” according to an email from Chief Executive Officer Matt Hicks. The CEO also noted that the cuts would be limited to primarily general and administrative positions, and not affect positions directly selling to customers or building out products.

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Red Hat was acquired by IBM in 2019 for almost $34 billion in one of the largest tech acquisitions of all time. Earlier in 2023, the computing giant announced plans to lay off roughly 3,900 employees out of its global workforce of 260,000. Recently, the company's CEO, Arvind Krishna, also announced a hiring freeze in its non-customer-facing jobs — positions the company believes can be filled by artificial intelligence.

Since its acquisition, Red Hat has been a significant driver of growth for IBM’s hybrid cloud computing business, growing 8% in the first quarter of 2023, according to financial filings.