IBM-owned Red Hat to cut 4% of global workforce

Largely based across Munster, latest accounts of Red Hat's Irish arm reported a headcount of more than 650 employees

Red Hat has established three offices across Dublin, Waterford and Cork. Photographer: Andrew Harrer/Bloomberg via Getty Images

IBM-owned software development company, Red Hat has announced layoffs impacting 4% of its workforce, a move that will impact around 800 employees.

The company joins the running list of tech firms that have cut their workforce across Ireland, with the impact on Red Hat's Irish employees - the majority of which are based across Munster - still unknown.

Acquired by software giant, IBM for $34bn in 2019, Red Hat has established three Irish offices in Cork, Waterford and Dublin, with most recent accounts of the firm's Irish arm reporting a headcount of more than 650 employees.

In an internal memo issued by Red Hat seen by the Irish Examiner, company CEO, Matt Hicks said the firm "grew too fast in certain areas" which added complexity to its future investments.

"The core of this decision is the need to rebalance where we are investing," Mr Hicks continued. "Better aligning budget and headcount are part of this rebalancing."

Mr Hicks also said that the decision was necessary to compete in today's environment, calling it "hard to reconcile" that cuts are needed while the company remains growing and successful.

The layoffs - which have already started and will continue through the end of Q2 - will mostly impact the firm's general and administrative roles, with the CEO assuring that positions related to direct consumer sales or product building would not be affected.

Last week, Red Hat's parent company, IBM beat profit estimates for Q1, with the firm's software and consulting businesses growing by 6% and 8.2%, respectively.

Software sales in the quarter increased by 2.6% to $5.9bn (€5.34bn), while growth at the Red Hat unit was 8%.

Following job cuts impacting 1.5% of IBM's global workforce in January, total revenue at the software company grew by 4.4% to $14.25bn (€12.9bn).