Rackspace literally decimates workforce: One in ten staffers let go this week
Updated Around 10 per cent of Rackspace staff, predominantly in the US it seems, got an unwelcome email this week informing them they were being let go.
Not that the work they do isn't needed. In an paperwork submitted to the SEC on Wednesday, Rackspace disclosed that 85 per cent of the positions being cut will be backfilled by workers in "offshore service centers." That'll be where wages are lower and labor laws more lax, presumably.
"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," Rackspace said.
"The Company estimates that it will incur expenses of approximately $70m to $80m related to the restructuring plan to be incurred over the next 12-24 months with the majority of expenses incurred in the next 12 months."
The cloudy biz also announced a reshuffle in management. COO Subroto Mukerji is being shifted to the role of president, and CFO Amar Maletira will take over most of Mukerji's responsibilities. In other words, the beancounters are ruling the roost.
