Rackspace, the corporation frequently held up as one of San Antonio’s tech-industry shining stars, is slashing 15% of its workforce, or about 750 jobs of its international workforce.
In a Tuesday filing with the U.S. Securities and Exchange Commission, the company said it will hand out pink slips over the next six months as it shifts focus from its original business of providing cloud computing services to offering technology infrastructure and services for artificial intelligence.
“This realignment is predominantly driven by the company’s strategic decision to deemphasize certain legacy service delivery functions (primarily within its Public Cloud business unit) and geographic rationalizations in favor of redeploying resources toward its enterprise AI buildout,” Rackspace said in its filing.
The company didn’t say how many jobs would be cut at its San Antonio headquarters, which employs roughly 500 people, according to previous SEC filings. It employs 5,000 people worldwide.
Based in the former Windsor Park Mall in Windcrest, Rackspace experienced brisk growth in the 2000s as it catered to the demand for cloud computing services. Led by entrepreneur and real-estate developer Graham Weston, who provided its original seed capital, the company raised $187.5 million in an initial public stock offering.
However, Rackspace’s history has been rockier over the past decade. Equity firm Apollo Global Management bought the company in 2016 in a $4.3 billion deal, and it’s implemented periodic layoffs amid shifts in the tech industry. During some of those downsizings, Rackspace has replaced U.S. workers with an overseas workforce.
Rackspace told the SEC it will incur one-time expenses of $14 million to $19 million this year due to its latest layoffs. However, the business expects to save as much as $85 million annually over the long term.
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