Hundreds of layoffs, but this smells of geopolitics, not downsizing
Red Hat appears to have fired its entire engineering team in China, which it no longer thinks is a country it needs to prioritize. Most of the team will move to India.
One of the first signs of the decision was a Xeet from a Chinese user with the handle @adam8157, who claimed a friend told them Red Hat’s engineering team has “graduated” – ironic Chinese slang for being fired.
A Hacker News post from a user who claims to be a principal software engineer at Red Hat China says that, on Thursday, he “woke up ... and noticed that I couldn't log in to the VPN. My access got restricted to various services that we use regularly, and no one told me why. We got a notice from our CTO shortly after to let us know that the company is ‘shifting its efforts to APAC hubs’. Utterly devastated.”
Numerous reports in Chinese media mention 300 to 500 layoffs, and a memo sent by Red Hat CTO Chris Wright.
A document posted by FOSS advocacy site Techrights appears to be that memo and explains that Red Hat has devised a “location strategy” under which it has “identified key sites for prioritized hiring and strategic workforce investment.”
Red Hat has decided India is a key site. China isn’t. So Red Hat will stop engineering activities in the Middle Kingdom and move most of the jobs to India. Red Hat’s parent company IBM says it has more staff in India than the USA and 264,000 staff overall.
The memo states that quitting China won’t mean a net reduction in head count.
It also states that the change won’t be made public, so while The Register has asked Red Hat for comment we’re not holding out much hope that the IBM business unit will reply.
We will, of course, update this story if we hear anything official.
Red Hat is not the only western technology company to reduce its presence in China. Microsoft famously quit the Middle Kingdom in 2025 after admitting some of the engineers who supported its Azure implementation for the US Department of Defense worked behind the Great Firewall.
Secretary of Defense Pete Hegeseth said Microsoft “exposed the Defense Department to unacceptable risk.”
Red Hat has supplied various branches of the US military with its products for many years and, in 2024, scored a $848 million deal under the Department of Defense Enterprise Software Initiative. Maybe the outfit has decided it needs to display national security credentials and avoid Washington’s ire.
China is a colossal market, but its government increasingly suggests buyers invest in locally-made products. Because Red Hat releases much of its code as open source, Chinese vendors can use the company’s tech – or at least the bits it allows to appear in CentOS. Red Hat’s move therefore won’t hurt China much, especially as it still sells its products in the Middle Kingdom.
The move may hurt Red Hat a little because China is home to many very talented programmers. That upside is balanced by China’s unique regulatory and legal system that means most large organizations in China employ representatives of the Communist Party, and many of those members organize party cells in the workplace. Perhaps Red Hat just wants to operate in a less complicated jurisdiction that, unlike China, is not accused of fostering industrial espionage. ®