Red Hat forced to hire cheaper, less senior engineers amid budget freeze

Email tells bosses to down-level open positions to control costs


Exclusive Next year, IBM's Red Hat plans to cut back on hiring senior engineers in an effort largely aimed at controlling costs.

An internal email sent on Wednesday by Timothy Cramer, SVP of software engineering, to Red Hat managers directs hiring requisitions to be made at a lower level of seniority than usual.

"All new plan reqs should be opened at a level below senior (e.g., Associate Software Engineer or Software Engineer)," the message says.

"While this change allows us to use our budget more effectively, it also helps us balance the organization as we have many engineers with senior titles. We recognize that this will mean we need to plan for training and mentoring, promotions, and internal mobility as well, and we are here to support you in that."

All new plan reqs should be opened at a level below senior

The hiring budget update also says that current requisitions and backfills – positions vacated that need to be filled – should be offered at a reduced level.

"All current reqs and future backfills will be down-leveled by one level by default (e.g., Senior Software Engineer to Software Engineer)," the memo explained.

The email was provided to The Register by an anonymous individual claiming to be a Red Hat employee, and was confirmed to have come from Cramer by a Red Hat spokesperson.

Our source expressed concern that this decision, which applies to new hires, will harm the company. If Red Hat is unable to offer competitive pay or hire senior people, our source suggested, that's likely to limit the company's access to talent and to make it more difficult to retain existing skilled employees.

"The best talent wants to work with other like-minded and skilled people," our source said.

A set of FAQs prepared to address employee concerns about the situation indicate that Red Hat managers understand the staff retention risk the decision creates. The response to a question about how the policy will affect employees who want to move jobs within Red Hat but don't want a title and pay demotion acknowledges the challenge of implementing this policy.

The reply notes that "moving reqs a level lower could hamper [employee mobility]" and says the managers involved can make an exception request if necessary.

Cramer's memo describes the situation as "a great challenge for [calendar year] '22."

"We need to deliver on our 3-year strategy (where we are the tip of the spear) while balancing a lean budget increase (essentially, $0) and continuing to invest in our current associates as a priority," he wrote.

We need to deliver on our 3-year strategy ... while balancing a lean budget increase (essentially, $0)

This represents a significant change from IBM's latest quarter when Red Hat's parent was "aggressively" hiring to "[bring] in technical talent in Red Hat," as CFO Jim Kavanaugh described the situation during IBM's Q3 investor briefing.

A spokesperson for Red Hat confirmed the authenticity of the leaked email though said the message lacked important context.

"Tim’s group represents one function in Red Hat that had a tremendous amount of growth this year," Red Hat's spokesperson said. "We are excited to see his team incorporate and leverage the almost 1,000 new hires they brought on board while we invest in the other aspects of the business.

"As a whole, Red Hat has added more than 2,200 new associates this year to help us meet demand for hybrid cloud technology and to grow in areas like managed services and edge. As we continue to invest in those areas and beyond, we anticipate continuing that growth across Red Hat."

In 2022, that figure is currently set at around 200.

"Even with an almost flat budget, we still aim to hire around 200 additional associates next year, with more than 25 per cent of them scaling up our SRE organization to align with our 3-year strategy goals around managed services," said Cramer in his memo.

Red Hat has been described as a financial bright spot amid IBM's more beleaguered lines of business. The Linux biz, acquired for $34bn in July 2019, grew 17 per cent, according to IBM's Q3 2021 earnings report.

Though IBM does not break Red Hat's results out from the rest of its Cloud and Cognitive Software segment, up 2.5 per cent to $5.7bn in Q3, our source told us that Red Hat booked almost $1bn in business for the quarter, which was about 90 per cent of IBM's target.

Whatever IBM is doing with Red Hat's rising revenue – now at an annual run rate that's likely above $4bn – those results aren't showing up in Red Hat's hiring budget. ®


Other stories you might like

  • Your snoozing iOS 15 iPhone may actually be sleeping with one antenna open
    No, you're not really gonna be hacked. But you may be surprised

    Some research into the potentially exploitable low-power state of iPhones has sparked headlines this week.

    While pretty much no one is going to utilize the study's findings to attack Apple users in any meaningful way, and only the most high-profile targets may find themselves troubled by all this, it at least provides some insight into what exactly your iOS handheld is up to when it's seemingly off or asleep. Or none of this is news to you. We'll see.

    According to the research, an Apple iPhone that goes asleep into low-power mode or is turned off isn't necessarily protected against surveillance. That's because some parts of it are still operating at low power.

    Continue reading
  • China will produce one in five of the chips it uses in 2026, says analyst
    Well short of planned 70 percent domestic capacity

    China’s integrated circuit (IC) production has failed to keep pace with its appetite for silicon, with market research firm IC Insights predcicting the nation will produce only one in five ICs it uses in 2026.

    That figure is a increase from 2021's one in six, and reflects eight percent compound annual growth rate from 2021 to 2026. But it means China will miss its own targets for locally-made-and-consumed silicon.

    “Although China has been the largest consuming country for ICs since 2005, it does not necessarily mean that large increases in IC production within China would immediately follow, or ever follow” said the firm in a bulletin on Wednesday.

    Continue reading
  • Tencent happily parting ways with loss-making cloud customers
    Cutting costs across sprawling business as COVID makes life hard in China

    Chinese tech giant Tencent has recorded its first ever quarter-to-quarter revenue fall, warned that COVID-19 lockdowns will hurt messing with its business, and cautioned against assumptions that Beijing is ready to enthusiastically support tech companies.

    On its Q1 2022 earnings call yesterday, the company offered more explanation of its shifting cloud strategy.

    Chief strategy officer James Mitchell told investors the company is pleased to have shown loss-making cloud customers the door, and “proactively scaled back … deeply discounted infrastructure-only contracts for basic services such as cloud compute and content delivery network.” Projects that had high costs and/or relied on sub-contractors have also been scaled back.

    Continue reading
  • Will this be one of the world's first RISC-V laptops?
    A sneak peek at a notebook that could be revealed this year

    Pic As Apple and Qualcomm push for more Arm adoption in the notebook space, we have come across a photo of what could become one of the world's first laptops to use the open-source RISC-V instruction set architecture.

    In an interview with The Register, Calista Redmond, CEO of RISC-V International, signaled we will see a RISC-V laptop revealed sometime this year as the ISA's governing body works to garner more financial and development support from large companies.

    It turns out Philipp Tomsich, chair of RISC-V International's software committee, dangled a photo of what could likely be the laptop in question earlier this month in front of RISC-V Week attendees in Paris.

    Continue reading
  • Did ID.me hoodwink Americans with IRS facial-recognition tech, senators ask
    Biz tells us: Won't someone please think of the ... fraud we've stopped

    Democrat senators want the FTC to investigate "evidence of deceptive statements" made by ID.me regarding the facial-recognition technology it controversially built for Uncle Sam.

    ID.me made headlines this year when the IRS said US taxpayers would have to enroll in the startup's facial-recognition system to access their tax records in the future. After a public backlash, the IRS reconsidered its plans, and said taxpayers could choose non-biometric methods to verify their identity with the agency online.

    Just before the IRS controversy, ID.me said it uses one-to-one face comparisons. "Our one-to-one face match is comparable to taking a selfie to unlock a smartphone. ID.me does not use one-to-many facial recognition, which is more complex and problematic. Further, privacy is core to our mission and we do not sell the personal information of our users," it said in January.

    Continue reading
  • Meet Wizard Spider, the multimillion-dollar gang behind Conti, Ryuk malware
    Russia-linked crime-as-a-service crew is rich, professional – and investing in R&D

    Analysis Wizard Spider, the Russia-linked crew behind high-profile malware Conti, Ryuk and Trickbot, has grown over the past five years into a multimillion-dollar organization that has built a corporate-like operating model, a year-long study has found.

    In a technical report this week, the folks at Prodaft, which has been tracking the cybercrime gang since 2021, outlined its own findings on Wizard Spider, supplemented by info that leaked about the Conti operation in February after the crooks publicly sided with Russia during the illegal invasion of Ukraine.

    What Prodaft found was a gang sitting on assets worth hundreds of millions of dollars funneled from multiple sophisticated malware variants. Wizard Spider, we're told, runs as a business with a complex network of subgroups and teams that target specific types of software, and has associations with other well-known miscreants, including those behind REvil and Qbot (also known as Qakbot or Pinkslipbot).

    Continue reading
  • Supreme Court urged to halt 'unconstitutional' Texas content-no-moderation law
    Everyone's entitled to a viewpoint but what's your viewpoint on what exactly is and isn't a viewpoint?

    A coalition of advocacy groups on Tuesday asked the US Supreme Court to block Texas' social media law HB 20 after the US Fifth Circuit Court of Appeals last week lifted a preliminary injunction that had kept it from taking effect.

    The Lone Star State law, which forbids large social media platforms from moderating content that's "lawful-but-awful," as advocacy group the Center for Democracy and Technology puts it, was approved last September by Governor Greg Abbott (R). It was immediately challenged in court and the judge hearing the case imposed a preliminary injunction, preventing the legislation from being enforced, on the basis that the trade groups opposing it – NetChoice and CCIA – were likely to prevail.

    But that injunction was lifted on appeal. That case continues to be litigated, but thanks to the Fifth Circuit, HB 20 can be enforced even as its constitutionality remains in dispute, hence the coalition's application [PDF] this month to the Supreme Court.

    Continue reading
  • How these crooks backdoor online shops and siphon victims' credit card info
    FBI and co blow lid off latest PHP tampering scam

    The FBI and its friends have warned businesses of crooks scraping people's credit-card details from tampered payment pages on compromised websites.

    It's an age-old problem: someone breaks into your online store and alters the code so that as your customers enter their info, copies of their data is siphoned to fraudsters to exploit. The Feds this week have detailed one such effort that reared its head lately.

    As early as September 2020, we're told, miscreants compromised at least one American company's vulnerable website from three IP addresses: 80[.]249.207.19, 80[.]82.64.211 and 80[.]249.206.197. The intruders modified the web script TempOrders.php in an attempt to inject malicious code into the checkout.php page.

    Continue reading

Biting the hand that feeds IT © 1998–2022