WRAL Techwire
That price ($190 in cash for each share) only makes sense if IBM sees a lot of synergies between the two businesses,” Verdonik added. “It’s difficult to reap the benefits of synergies if the two businesses really do operate separately.
Verdonik doesn’t expect layoffs at Red Hat – but what about the other way around?
IBM recently acknowledged cutting 1,700 jobs and also has sold off some smaller business operations.
“I don’t know how this may affect IBM employees,” Verdonik notes. “I would be a little more worried about layoffs if I worked for IBM. IBM recently borrowed $20 Billion to pay for Red Hat. That debt service might cause IBM to do some cost cutting.”
As for Red Hat, Verdonik says the problem may be keeping employees from cashing out stock and leaving – as well as being recruited.
“For a company like Red Hat, a big part of their value is their employees,” Verdonik explains. “Most businesses in the software industry are scrambling to recruit people.
“I wouldn’t be worried about layoffs if I was a Red Hat employee.”
