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Rackspace Layoffs 2019: Cloud MSP Cuts 200 Employees

Rackspace has confirmed layoffs that span roughly 200 staff cuts worldwide. Still, the cloud-focused MSP (managed IT services provider) for Amazon Web Services (AWS), Microsoft Azure and Google Cloud Platform (GCP) has roughly 6,600 employees and is hiring in growth markets, so the job cuts appear very targeted in nature.

Rackspace, a Top 100 Public Cloud MSP headquartered in San Antonio, Texas, confirmed the targeted cuts in a statement to a local FOX News affiliate. But the company also emphasized that its business is stable and profitable — backed by more than 1,500 hires in 2018 and 200 additional positions open on its website.

Rackspace, like many IT companies these days, appears to be rebalancing its workforce from time to time — cutting headcount from slow-growth or shrinking product lines, while doubling down on faster-growth areas like cloud services, security, machine learning and artificial intelligence.

Rackspace: Cloud MSP Business Evolution, IPO?

Apollo Global Management acquired Rackspace for $4.3 billion and took the company private in 2016.

Around that time, the acquired business was struggling to compete head-on in the public cloud services provider (CSP) market against Amazon Web Services (AWS) and Microsoft Azure. Amid that reality, Rackspace cut about 6 percent of its U.S. staff in 2017.

In a bit of a pivot, Rackspace refocused on:

Rumors about a potential Rackspace IPO emerged in 2018 but have since quieted down.

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