January 16, 2001, 11:29 AM — Popular Linux vendor Red Hat Monday closed one office in the U.S. and two in Europe, as it tries to deal with overlaps in personnel caused by the company's acquisitions made this year.
First on the chopping block, Red Hat's San Francisco office is shutting its doors and laying off 7 of the 20 people employed there. Those who retained their positions will have the option to work remotely or in other offices nearby, Red Hat spokeswoman Melissa London said.
Red Hat made the decision to close the office due to the close proximity of two other Red Hat offices in Oakland and Sunnyvale, and after the company's numerous acquisitions caused overlaps in the workforce, London said.
"It was really a case of reducing redundancies," London said. "Nine acquisitions over the last year have led to some overlaps."
Red Hat has enjoyed a prime position in the Linux market. The vendor distributes one of the most popular versions of the open source Linux operating system. Over the past few months, however, Red Hat, like a number of Linux vendors, has seen its stock price tumble from hey-day heights.
London insisted that the end of Red Hat's days in San Francisco does not reflect frailty in the company's cash flow. "Red Hat is a pretty cash-rich company," she said. "It has around $320 million in the bank."
The company also plans to close its Newberry, England office and relocate all the workers to another office nearby. In addition, an office in Cagnes sur Mer, France will shut down, with the employees making their way to Red Hat's Paris locale. While workers won't be laid off as a result as those two closures, Red Hat also sacked a further 13 staff at other offices elsewhere, London said.
Beginning in January, Red Hat acquired a number of companies and now seems ready to deal with the overflow in personnel those moves caused. Red Hat has bought such companies as C2Net Software, the developer of the Apache-based Stronghold Web server, Hell's Kitchen Systems, an e-commerce payment processing software maker, and Internet performance management software and services provider Bluecurve.
Red Hat, in Research Triangle Park, N.C., is at http://www.redhat.com/