In recent years, foreign software companies have been continuously downsizing in China. On April 9, several technology media outlets revealed that the global open-source software giant Red Hat from the United States will cease all engineering and research activities in China, affecting approximately 500 core developers.
According to an internal email disclosed by the technology media outlet “Cloud Headlines,” the company is adjusting its global research and development layout by halting engineering activities in China and transferring the related work to other engineering centers in the Asia-Pacific region.
Chris Wright, Vice President of Global Engineering at Red Hat, confirmed this news in the internal email. He wrote, “This is a very difficult decision. Speaking on behalf of the management team, we understand that this is an extremely challenging message for everyone because positions and personal lives will be directly affected.”
In response, a researcher named Cheng Yiliang (alias) from Nanjing commented to the reporter, “I am not surprised by Red Hat’s departure. Two years ago, Microsoft’s research department also left, and many other technology companies and chip design companies withdrew in 2022 and 2023. If they don’t leave, these companies have to deal with the Chinese Communist Party’s ‘Anti-Espionage Law’ all the time, occasional summons, and in a highly opaque regulatory environment, they simply cannot survive normally.”
The email listed the transition arrangements for affected employees: the affected employees will no longer carry out their daily work responsibilities with immediate effect, but their employment will remain until July 31, 2026, before officially terminating. During this period, Red Hat promises to provide severance compensation and transition support arrangements, and collaborate with the human resources partner LHH (Lee Hecht Harrison) to provide reemployment placement services for employees.
Cheng Yiliang said, “This scale of layoffs indicates that they (Red Hat) no longer consider China as an innovation center. I heard that some outstanding employees have already received invitations to work abroad, and I estimate that many of these technical elites will choose to ‘moisten’ out.”
Miss Zhang, formerly from the Human Resources Department of Alibaba in Hangzhou, told the reporter that Red Hat’s arrangements are typical transitional processes for foreign companies. She said, “This practice of having employees stop working but retaining their salary and benefits for a period of time usually corresponds to larger, systematic structural adjustments. They do not want to cause severe turmoil or negative public opinion in society, so it can be said to be a ‘low-profile’ way for foreign enterprises to exit the Chinese market.”
Li Yue (alias), an engineer in Beijing working on enterprise IT infrastructure, told the reporter that Red Hat has a significant influence in the enterprise operating system and cloud platform (such as RHEL, OpenShift) fields, with many large state-owned enterprises and banks using their products. If the entire research and development team withdraws, local technical support, security patch updates, and product iterations may be affected. “If these technical teams leave, let’s see how they (the government) manage. The economy in China is already a mess now. Even if Red Hat stays, there won’t be good development.”
Li Yue said that over the past decade, China has been both an important market for foreign companies and a hub for research and development, but this situation is changing. He said, “The market structure has changed. Chinese semiconductor companies, software companies, and chip companies are all built on foreign technology at the bottom level, and some technologies are acquired through improper means, bluntly speaking, ‘stolen.’ Now that others have withdrawn their R&D, the core codes and future architecture have been taken away. Where can China go to steal in the future?”
An economist named Guan Du (alias) from Fudan University told the reporter that the Chinese Communist Party has been continuously strengthening its data and technology control in recent years, pushing for decoupling from external technology systems. He said, “The United States has always criticized us for ‘trading market for technology,’ forcibly demanding core technology. The products developed by foreign companies at the cost of millions or even billions of dollars, once falling into the hands of Chinese companies, are often quickly replicated and dumped back into the American and European markets at low prices. If this predatory behavior is not stopped, foreign companies can only choose to completely close and leave.”