Red Hat forced to hire cheaper, less senior engineers amid budget freeze
- Reference: 1636073822
- News link: https://www.theregister.co.uk/2021/11/05/red_hat_jobs/
- Source link:
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.
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"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.
[2]
[3]
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.
[4]
"The best talent wants to work with other like-minded and skilled people," our source said.
[5]Kyndryl spins out of IBM, stock starts trading on NYSE – and shares tumble
[6]Red Hat Enterprise Linux 9 emerges in beta form
[7]IBM US staff must be fully vaccinated by December – or go back to bed without pay
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 [8]IBM's Q3 investor briefing.
A spokesperson for Red Hat confirmed the authenticity of the leaked email though said the message lacked important context.
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"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 [10]bright spot amid [11]IBM's more beleaguered lines of business. The Linux biz, acquired for $34bn in July 2019, grew 17 per cent, according to IBM's [12]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. ®
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[11] https://www.theregister.com/2021/10/21/ibm_q3_2021/
[12] https://newsroom.ibm.com/2021-10-20-IBM-Reports-2021-Third-Quarter-Results
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Money
I have no interest in taking a job with lower pay that a junior title implies. I would consider a lateral move for the same pay if I thought there was a much better upside for me even in my senile years (per the Ferals). I doubt anyone they would want to hire would consider a move to lower grade and pay.
Next year IBM's Red Hat plans to cut back on hiring senior engineers in an effort largely to control costs .
And now it starts.
I was going to post the exact same thing.
Obviously, I was beaten.
Who did not see that coming?
Let us all witness "the great squeeze".
Yup next step: "All these senior engineers who've been with us for years are too old expensive. Now we have a bunch of cheaper junior engineers who can be pushed around more easily trained up as required, lets get rid of the senior engineers to save money."
But the hiring of VPs will continue unabated. Until there are more VPs than Engineers.
I'm looking forward to seeing RHEL becoming a clone of Rocky or Alma Linux.
I'm sure that IBM would love to outsource all that tedious development of the OS to other organisations. That Big Red Logo company might actually have to invest a bit more perhaps?
(Probably not a whole yacht's worth, just a mast and a couple of sails.)
The fate of Little Red Riding Hat.
It makes sense that IBM would take it's winning strategy and apply it to little Red Riding Hat. What's rep for if not as flammable material to fuel next quarters management bonus?
Re: The fate of Little Red Riding Hat.
Some parable about a Golden Goose might also fit
Re: The fate of Little Red Riding Hat.
Duck hunting season. IBM likes to call experts and techincally minded as "wild ducks" .... Soon open season on duck hunting will happen
Just another form of training your replacement
That'll surely become tiresome to the older and more experienced employees who still want to and are fully capable of making contributions but are seen as a burden to IBM's bottom line goals.
Re: Just another form of training your replacement
Are there even any older workers left at IBM? They've been laying them off for years now. AMHIK, Class of 2013 RA victim.
Re: Just another form of training your replacement
I bet there are lifers who'll put up with any amount of bullshit to reach retirement whether that means they give a damn any more or not. The others will find employment elsewhere and take their skills with them. Either way, IBM has only hurt itself by treating its most experienced, knowledgeable staff like shit.
Re: Just another form of training your replacement
Virginia M. Rometty.
The only person at IBM over the age of 50 that actually reached the retirement age without getting laid off.
Re: Just another form of training your replacement
Virginia M. Rometty.
The only person at IBM over the age of 50 that actually reached the retirement age without getting laid off.
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In a knowledge economy a big part of your assets are your people.
I was wondering about this approach less than a day ago and realised that it takes years to kill a company, but remuneration is typically based on short term metrics. If you can live like bandits for 4 years and leave the sinking ship before it goes south then I guess that constitutes success for these people.
How IBM of them.
Joke
Don't kid yourself. This is IBM speaking.
Red Hat turns to running the company by spreadsheet
I currently work somewhere like this, and it has been sad to see long time staff laid off, not slackers or wastes of space, but good people you like and respect, purely on the basis of "their salary was too high".
All hiring now comes from low wage countries, ....and they are hiring low, we have had 3 people in a row get hired in the EMEA area, not turning up, citing the pay being too low as the reason.(technical jobs in a software provider)
To run a business effectively you need people who can do the job and are happy, too many companies forget this and concentrate solely on the balance sheet.
I spent some time going to events about start-ups and new businesses and the overriding message was that companies that are enthusiastic about their products and believe in the company are the ones that do well, companies started with the idea to become rich normally don't do so well, I believe the same happens with larger established companies too, once they focus on cost to the detriment of everything else they will not do well.
I hope Red Hat re-thinks this policy, they were a good company, and I like their products.
The staff are what makes a company a success, smart companies look after their staff and reward them for their work
Re: Red Hat turns to running the company by spreadsheet
Indeed, smart companies do. That rules out IBM.
The problem, as always, is management. When the company starts out, they have the world to conquer. It's thrilling to progress upwards, to build a solid team and see competence and experience flourish while making oodles of money.
Two decades later, the management team has changed. The people who built the company are gone, the employees who still like it there are now only "assets". The new management knows all about managing assets : they compute cost and returns on their little spreadsheet line by line. That ensures that they don't have the foggiest idea why Martin is costing so much per month and yet brings in next to nothing.
That's because they don't know that Martin is the living, breathing encyclopeadia on Product X, and spends most of his working day answering pointed questions from his colleagues on the finer points of debugging this or that problem.
So management decides to get rid of Martin, and the whole house of cards starts its trek towards ending up on the floor.
Re: Red Hat turns to running the company by spreadsheet
"That's because they don't know that Martin is the living, breathing encyclopeadia on Product X, and spends most of his working day answering pointed questions from his colleagues on the finer points of debugging this or that problem."
So long as Martin didn't engineer that for himself. I utterly dispise people who make themselves invaluable, it's selfish to hold a company to ransome like that. However if Martin fell into that position, which is actually closer to reality most of the time in my experience 'cos no one else wants the job, then that's the company's fault if they shoot themselves in the foot. They cut the workforce, people have to become the centre of all knowledge on things, then they decide to come after those people and then they realise too late they've created a monster. They try to shaft poor Martin but Martin often has the last laugh, Martin often gets snapped up by another company who sees Martin's potential as a valuable asset.
It's just life in the modern workforce, I've seen and been a Martin at various times.
Re: Red Hat turns to running the company by spreadsheet
>"I utterly dispise people who make themselves invaluable, it's selfish to hold a company to ransome like that."
The company that allows employee to be in such position definitely deserves it. It is their responsibility to organize process in such a way that it can not be held hostage by a single person's "engineering". If owner lets all vital knowledge stay in single person that owner deserves Darwin's award
Re: Red Hat turns to running the company by spreadsheet
Martin is probably the only last survivor of his team.
Re: Red Hat turns to running the company by spreadsheet
CHRIST I've seen a lot of that in the big corporates.
Re: Red Hat turns to running the company by spreadsheet
Nobody ion their right mind would make themselves indispensable on a single product. Some might try but they're invariably the useless ones. The reality is that this process happens because of a "last man standing" effect. Management will ignore warnings while the system seems to keep working.
(...and, yes, my name is Martin and I've found myself in this position but never contrived it. But I'm not 'that' Martin, just 'another' Martin.)
Re: Red Hat turns to running the company by spreadsheet
Documenting quirks and details is also futile. Nobody reads it and it gets lost quickly, especially if some document managing indexing and storage program is used. So the last person clued becomes a Martin. The few self styled indispensables I have run across are usually next to useless and mere sociopaths who only fool manglement.
Re: Red Hat turns to running the company by spreadsheet
I once worked for a large company with a very complex software ecosystem built upon 10-20 year old internals. They were very compartmentalized, with explicit management approval needed for each component of the massive software repository.
I needed to find info on an internal EEPROM format. The active x86 product only used a few fields, mixed with knowledge built into the Windows drivers. The ARM and ARM/Linux uses would need to use more of the info.
I spent a bunch of time trying to find someone to tell me about it or where the documentation was, or least give a hint where to start asking and looking. No one would acknowledge ever having worked on it, even when their name was on the check-in for related code, at most hinting that someone else had and giving me another place to look. It took me several weeks longer than it should have to write guessed-at documentation and my guessed-at code.
In the years since I figured out what led to that situation. No one wanted to be the expert on legacy knowledge. You would spend your days being valuable to the company by answering questions, but useless to your immediate boss. You wouldn't be 'productive enough' to work on the important new projects that would lead to respect and promotion. The successful people "forgot" everything except when it was needed for their current or future project.
Re: Red Hat turns to running the company by spreadsheet
I very much doubt you need people happy to run a company properly. I very much doubt you even need to provide a meaningful service or produce anything. You're living with a pre-1970s mentatility.
All too common
This is the sort of behaviour that buys you cost saving and better profitability in the short to medium term. But sows the seeds of your long term undoing. No problem though, the MBA who thought of it got a big bonus and will by then have moved on to the next business triumph (cost savings and long term business failure).
Worse still this kind of crap is rewarded by the stock market, make a pile of people redundant and your share price goes up. Doesn't matter that there are less people to do the work and a pile of skills will have walked out the door (so some work maybe impossible to do now), so will maybe reduce future profitability.
Re: All too common
But firing 10% of your workforce saves 10% of the budget and that's nearly the same as making 10% more money and if you keep doing it you eventually get profitable once all the people are gone
What IBM did next ...
Resource Actions and a brand, spanking new helicopter for Ginny
A plan for Red Hat...
They could always fire Poettering, get in a dozen grads to start undoing systemd, save money and do the Linux world a favour.
Re: A plan for Red Hat...
Really good things never happen. However a more feasible possibility is that RH's agenda no longer dominates and we get back to something more Unix-like.
Re: A plan for Red Hat...
If that happens happy days will be here again!
"something more Unix-like"
Yes, if there is a company that could bring IT back to the 1970s that's IBM.
If you need internal mobility, eat a strong curry.
Oh no
This is how Red Hat dies.
You'd think companies, especially IBM , have learned their lesson but nope, they're still pulling off this kind of crap.
Re: Oh no
Wall Street rewards mergers of market leaders handsomely and continues to reward the squeezing out of costs over the years due to the merger. The union of the companies becomes stolid, so they pick a fresh target to restart the cycle and gain notice and future rewards. The fish rots from the head.
This cr*p started almost immediately IBM took over
I got squeezed out by Red Hat in 2019. Strangely I was the only team member (the only 50+ year old on the team) "encouraged" to leave at the time. Other senior staff were already leaving in droves in 2019 too.
Re: This cr*p started almost immediately IBM took over
Virginia M. Rometty.
--
The only person at IBM over the age of 50 that actually reached the retirement age without getting laid off.
/. picked up this. One comment there was along the lines of there being nothing as expensive as cheap engineers. There is; MBAs at any price.
Seems like the IBM "fuck the world how do we make a profit and who can we sack" is starting to bite.
time to re-skill
I observed that RH9 seems less bad than it might be but I feel that I may need to get up to speed with a Debian type distro now so may not get to find what RHEL9 is like.
I'm getting too old for this shit!
You're all such pessimists. Look at the strength and market dominance of Lotus, Tivoli, XIV, Storwize, Transitive.....
Oh.
We all saw this comming
$32bill borrowed and Mrs Romettys fallouts take their tolls. Rometty reigns in declining market cap. IBM used to have money in the bank, but now it is all debt. Stock buybacks to keep the value bloated emptied the coffers. Those interest rates could have payrolled the seniors.
Just like the car industry
Make a good product, the MBA's/Spreadsheet monkeys arrive, cost cut and the demise of a good brand is inevitable.
Have we heard this story somewhere before, not that long ago ... ?
That's worrying ~
What went wrong at Intel?
They got taken over by boardroom pirates and management types, accountants and salesmen, not engineers. They ended up with a bloke in charge who did have an engineering degree, but all he's ever done was management. And he presided over the change in the company to reduce R&D budgets and hire junior people and slash the R&D spending ... now maybe he had a point, because Intel did have a stratospheric R&D budget, but while maybe it needed a bit of a trim, you don't let fkn accountants decide what needs trimming, you get the engineers to decide. So after they got rid of all the senior and talented engineers, they decided to make 10nm using less of that super-new-fangled extreme UV and rely on good old Intel engineering and resourcefulness to make 10nm work on older machinery, and let the damn engineers figure out the problems because that's what we pay them for. So for 6 years or something, the remains of engineering (the good ones having left or been sacked) tried to make 10nm work on a production system that struggles with 14nm .... and when things don't work, you blame the engineers because theyr'e not doing their job. Let's sack a few and hire fresh graduates... Now ~ How's your corporate bonus looking?
Now, who would like to pull a figure out of their arse and tell me how much the corporate and management and sales focus at Intel for 6 or 7 years co$t them?
I would suggest (I don't know and nor does anybody else) it cost then in the ballpark of a hundred billion dollar$ ...
So what's happening at RedHat? Now that IBM own them body & soul? Well, it's not exactly the same thing, not quite, but there are some obvious parallels...
Welcome to IBM
All the long termers will be subject to waves of petty bullshit designed to make them leave so IBM doesn't have to pay their wages or give them expensive severance packages.
Typical
I knew when IBM bought RedHat it would not be a good thing. Big companies buy successful ones for the revenue stream. They kill R&D and layoff expensive employees. Customer service be damned. They will suck the revenue for until many customers leave. I remember when Symantec bought Veritas software in the 90s and the same thing happened. Netbackup R&D slowed and customer service went down the tubes.
What could possibly go wrong?
*Sits back & munches popcorn to watch this shitshow*