Rackspace lays off about 750 employees to boost enterprise AI
Rackspace Technology is letting go of about 750 employees, roughly 15% of its global team, as it pivots toward boosting its enterprise AI services.
Most workers got the news right after the decision was made on June 10, marking a big change for the company.
Rackspace expects $75 million-$85 million savings, $14 million-$19 million charges
The move is expected to save Rackspace $75 million to $85 million each year, with much of that money going straight into new AI infrastructure and engineering teams for industries with strict regulations.
There will also be one-time charges of between $14 million and $19 million during 2026.
The company recently teamed up with AMD to build secure AI solutions, and CEO Gajen Kandiah says demand for managed AI services is only growing, even though this transition has been tough for those affected.