Red Hat has been a profitable company for years
Then why the layoffs?
Red Hat's decision to lay off around 800 people, or four percent of the company, has not only upset employees, it's fueled calls to unionize. A message earlier this week on Red Hat's internal mailing list, known as memo-list, challenges public statements about the layoffs by CEO Matt Hicks and other executives. "Red Hat has …
... Things like our stock price are based on the probability of our continued and future success, not our success in the moment, so in environments like this, improving our profitability is even more critical to invest in our future.
Translation: Stock price depends on growing next quarters profit.
I'd guess half the 19K employees support the 70-100K companies using RedHat products. Another quarter are developers and a quarter are salespeople. The frothy layer of executives on top decide what sort of coffee RedHat is -- the beans, the process, the grind, and whether espresso or latte.
Only, RedHat executives are tuning their beverage to their one true customer - IBM executives.
Matt Hicks' response mirrors the usual, chutzpah-heavy justifications Wall St. gives for firing people. Instead of bowing to peer pressure, he should consider the canonical example of what his people are referring to (whether they say it ot not) -- H-P in the 70s! That's where Messers. Hewlett and Packard (the originals) had H-P staff take a pay cut rather than firing people.
Matt seems to an engineer who got his start in consulting for IBM. He then dove straight into internal RedHat IT leadership with Executive MBA-like training at Harvard along the way. A stint as a RedHat OS developer or in product support may have brought him a different, more sympathetic perspective -- the 'original American way' at the 'original H-P'.
"We wanted to believe in the Open Organization, that we were a People Company. In the end, executives treated us as disposable." <- The best work experience you will ever receive right there. There is no such thing as a people company. Even worse are those that portray themselves as "a family". We are all rows in an Excel spreadsheet of man hours, nothing more and nothing less. A part of the process that has yet to be automated. Keep your skills sharp, your professional network as wide as possible, and always expect a pink slip in the mail.
It was just a matter of time before IBM's CEO would pressure Matt Hicks to adopt their business culture of Financial Engineering. IBM paid a large (excessive) premium to acquire Red Hat, and now Arvind Krishna is fully aware of the open-source business model growth limitations. Truly, this layoff was inevitable. And, I predict more layoffs to come at Red Hat, especially in the bloated corporate marketing organization. Meanwhile, Whitehurst and Cormier are likely still amused by how easily they dupped IBM's inept leadership team to agree to a $34B deal.
@pimppetgaeghsr "software engineers can just walk out and get a new job the next day."
Right! What world do you live in the one where the streets of London are paved with gold?
I suppose all these large layoffs from the likes of MS Facebook and Google etc, all the software engineers when told they were to be laid off could not believe their luck. As they knew the next day they would have a new job that paid just as well paid and some compensation. They would be quids in.
And even if you can "get a job the next day", there's no guarantee that changing jobs won't adversely affect you. Maybe the new job isn't as close to your interests; maybe your coworkers or work conditions are less appealing. Maybe you'll have to relocate. Maybe the new employer turns out to be rubbish.
Of course, it might be better, too – but it's a gamble. Some people are risk-averse, and some others ought to be. And whatever happens, there's the cognitive load of taking on a new position in a new organization, and the attendant stress. The "you can always get a new job" (and its extended version "you can always quit and get a new job") philosophy does not realistically assess the costs of doing so, even for high-demand employees.
An acronym that came to mind after listening to a bunch of IBM Sales People tell a bunch of (Australian) Government Employees (circa 1995) about the benefits of using IBM Services...
The Exact details of said conversations are lost in antiquity but I do remember that I thought it was the biggest load of BullSh*t I had ever heard!
Seems nothing has changed
I am sure American reading the mailing list have no idea where where this is about, they are used to being slave donkeys pulling the cart with "the American dream" as a carrot.
Europe had three socialist revolutions, 1789, 1917 and 1933, each of which changed the relation between workers, nobility and oligarchs.
After some struggles and failures, Europe created a system where the smart and hard working are rewarded, but not to a level where they are given the power to destroy society and appoint politicians by "campaign donations", which would be earmarked "systemic corruption" in any country outside of USA.
USA abandoned slavery 150 years ago, so there you are.
Oh, do fuck off. Many people in the US are aware of working conditions and regulations in other countries, and their histories (which are far more complex than you suggest).
And the US didn't "abandon" slavery with the 14th Amendment; it nationalized it (and it's been privatizing it again in recent decades).
Many Americans are not aware of other countries. They havent a clue, they can barely find Europe or Australia or China on a world map. Just look at all that flag waving and half of them think free healthcare is socalist, but free military is not socialist.
1933 was just another moment when Big Money ensured to have someone at the top to f*ck workers deeper and line the pockets of big bosses. Those big bosses even got more: slaves at will to work and die in their factories.
If a third date should be added, it should be the European People's Spring of 1848.
Maybe, just maybe, RedHat/IBM are realizing what a lot of other US tech companies are realizing. That they have a certain amount of employees that are not actually producing anything of value for the company. (In our company we call it the fired egg. The yolk are all the peoples that produce results, the white are all the people that just "exist"!)
But oh yes, form a Union, then the Union decides what you will be paid. The union will decide that you will be paid the same as the slacker in the next desk no matter if you produce 10x more results than he does because, well, equity!
If you are/were productive you will find a new job, possibly making more that you did before. if you're not, well, sucks to be you!
You do realise that it is the white that nourishes the growing yolk, don't you?
If unions were of no benefit to their members, people wouldn't join them. Yet they do join, so there must be some perceived benefit.
Maybe it's the guaranteed work breaks, the paid holidays, the pension contributions, the sick pay, redundancy pay, the lack of a "fire-at-will" option for employers?
Maybe it's all of the above?
Typical American, believing that all pay is based on merit. Next your going to tell me that the CEO who earns more than 100x the average worker of a company works 100x as hard.
Thew orld is not fair most people in the third world work a lot harder for a lot less, the world is not fair stop pretending that it is.