Rackspace is cuting 6% of its workforce

Rackspace is cuting 6% of its workforce

Cuts come about 3 months after the managed hosting and cloud provider went private

Via a blog post by CEO Taylor Rhodes, Texas-based cloud computing company Rackspace announced that it is cutting about 6% of its workforce in areas that have seen slowed growth in recent years.

+MORE AT NETWORK WORLD: How Rackspace will stay alive in cloud: Stop competing with Amazon, start partnering +

Rhodes says the cuts will primarily be focused on the company’s corporate administrative expenses and management, and that the company’s “front-line” support staff and product teams will be least impacted by the layoffs. Rackspace did not provide additional details about where the cuts will come from, saying only they are in areas “where the workforce has grown more rapidly than the revenue.”

Fast-growing sectors of the company’s business – notably its Managed Security, Hosted OpenStack and VMware clouds, and Managed Amazon Web Services and Microsoft Azure public cloud products – will not be cut.

“We will continue to invest and build our capabilities in these fast-growing lines of business. We have big ambitions, because the complexity and speed of change our customers are facing as they move into the multi-cloud world have never been higher,” Rhodes wrote in a blog post announcing the layoffs. He called the cuts “painful, necessary and manageable.”

The cuts come about three months after Rackspace officially went private. Apollo Global Management announced plans to buy Rackspace in August 2016 for $4.3 billion. The announcement capped off a multi-year period when rumors about the company's potential sale swirled.

Rackspace was founded in 1998 as a managed hosting company, but has progressed to offer its own IaaS public cloud based on OpenStack, to now helping customers use public IaaS cloud platforms. For more about Rackspace’s future strategy, check out an in-depth interview with Rhodes here.

Follow Us

Join the newsletter!


Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags azureAmazon Web ServicesOpenStack

Show Comments