JULY 22, 2021 — MAJOR RESTRUCTURING WITH A 10% REDUCTION IN FORCE
According to a filing with the Securities and Exchange Commission, the company plans a multi-million dollar restructuring that will result in a major reduction in force, projected to be at least 10% of the workforce over the next twelve months (2021-22). It is anticipated that the majority of the impacted workers will be from the company’s headquarters in Windcrest. Texas.
Approximately 85% of the functions will be transferred to the company’s offshore service centers.
According to CEO Kevin Jones, “The initiatives announced today will enable Rackspace Technology to take full advantage of current market trends, drive significant earnings leverage as revenue continues to grow, and compete even more effectively with other cloud service providers. In addition, we are more closely aligning our Rackers with next-generation service offerings that offer more compelling growth potential both for them and the company.”
“On July 21, 2021, the Company committed to an internal restructuring plan, which will drive a change in the types of and location of certain positions and is expected to result in the termination of approximately 10% of the Company’s workforce. The Company anticipates that approximately 85% of these roles will be backfilled in the Company’s offshore service centers. As part of the plan, the Company also is expanding its internal training program to further develop expertise in cloud services. The rebalance in workforce is a component of a broader strategic review of the Company’s operations that is intended to more effectively align the Company’s resources with its business priorities in high growth areas. Substantially all of the employees impacted by the reduction in force were notified of the reduction on July 22, 2021 and will exit the Company over the next 12 months.”
JULY 22, 2019 — Original post…
San Antonio-based Rackspace Hosting, a cloud development, hosting, and management company owned by private equity firm Apollo Global Management, continues its restructuring/repositioning by transferring 125 quality assurance and support employees to Pune, India-based Tech Mahindra, a business process outsourcer and consultancy, as part of a strategic partnership that appears to be able to compete with Amazon AWS and Microsoft Azure. Since being acquired and taken private by Apollo in 2016 for approximately $4.3 billion, there have been three layoffs of approximately 600 employees. It was rumored that Apollo was looking to take the company public in once again in 2018 to spread the risk and reduce their capital investment.
One cannot help but wonder if these employees will be replaced with Indian counterparts in the coming year?
According to a company spokesperson, “Our partnership with Tech Mahindra is a powerful combination. Their understanding of innovative and customer-centric IT experiences is uniquely complementary to how Rackspace provides a Fanatical Experience. We believe that this will help generate industry-leading technology services and platforms. With 121,000+ associates, working across 90 countries and helping 938 global customers, including Fortune 500 companies, this partnership will allow us to drive far more business impact for our customers.”
Change is coming. There will always be a tomorrow, no matter how much you may try to ignore it. There are no guarantees in life or promises for a bright future. Just because something bad hasn't happened yet, doesn't mean it won't. It can happen to anyone, anytime, anywhere. No one is guaranteed to wake up tomorrow and still have a job by evening. Are you now wondering, Am I Next?