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Red Hat closes trio of offices, lays off 20

The leading seller of Linux software and services closes three offices and lays off 20 employees whose positions became redundant after acquisitions.

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Stephen Shankland
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Red Hat, the leading seller of Linux software and services, closed three offices and laid off 20 employees Monday, the company said.

Red Hat laid off personnel doing duplicate work, said spokeswoman Melissa London. "Nine acquisitions in the past year created a lot of redundancies," she said. The company now has 550 employees, she said.

Seven of the layoffs were from the San Francisco office, a site Red Hat picked up when it acquired Atomic Vision, then a key part of the company's plans to make its Web site a source of revenue. Red Hat originally hoped to make its site "the definitive online destination for the open-source community," but much of the Web traffic goes to VA Linux Systems sites such as Slashdot, Linux.com and SourceForge.

The San Francisco operation also was the site of an effort called Wide Open News that Red Hat largely scaled back in May.

The remaining nine to 13 personnel from the San Francisco operation will be transferred to other nearby offices in Sunnyvale and Oakland, London said.

Red Hat also closed a 15-person office in Newbury, England, and a five-person office in Cagnes sur Mer, France, she said. Employees from those offices won't be laid off but instead will be transferred to Red Hat's Surrey and Paris offices, respectively.

Red Hat now has 12 offices.

The company has seen its stock price slide since the early days of the Linux investment boom, when enthusiasm for the operating system sent stock prices soaring. The company's shares closed Monday at $6.34, down 22 cents and less than the split-adjusted initial public offering price of $7. Red Hat, the first Linux company to go public, was the last independent company to see its stock sink below its IPO price.

Caldera Systems is even farther underwater, with a stock price that closed Monday at $1.84, after an IPO at $14. VA Linux Systems closed Monday at $8.72, after an IPO at $30.

Meanwhile, VA Linux Systems acquired Andover.Net, and Sun Microsystems is in the process of acquiring Cobalt Networks.

"These layoffs have nothing to do with the stock price," London said. "The entire sector is down."