Rackspace is cutting its workforce again.
The San Antonio-based tech company said it would cut 15% of its global workforce — roughly 750 workers — in a filing with the U.S. Securities and Exchange Commission on Tuesday.
The cuts are part of Rackspace’s new focus on 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,” read the SEC filing.
Rackspace rose to prominence in San Antonio in the 2000s based on its cloud management and customer service capabilities. The company laid off 10% of its workforce in 2021, offshoring many of those jobs.
A presentation to investors after the first quarter of 2026 showed the company had accumulated over $2.7 billion in total debt. Rackspace saw a 2% year-over-year increase in revenues in that same quarter.
Now, the company is shifting its focus to manage artificial intelligence operations and is changing its workforce to meet those needs. Rackspace’s board of directors decided on June 10 to terminate 15% of its workforce.
The company had employed around 5,000 workers in 22 countries, according to its annual report to the SEC at the end of 2025. Around 500 of those workers were based at its headquarters in San Antonio and 70% of all workers were remote.
Terminating 750 workers will cost Rackspace between $14 million and $19 million, it told the SEC.
“These charges will consist primarily of severance payments, healthcare benefits, and other termination-related costs,” Rackspace officials said in their filing.
But the cuts will save Rackspace between $75 million and $85 million annually, the company estimated. That money will be reinvested into forward-deployed engineering, AI solutions and its enterprise AI infrastructure.
Rackspace has shifted its focus to managing cloud and data infrastructure for AI under new CEO Gajen Kandiah, who was appointed last year.
In May, Rackspace signed an agreement with Advanced Micro Devices (AMD), a semiconductor manufacturer, to move toward building and operating the technology that runs AI programs for client businesses.
“We believe we can establish governed enterprise AI infrastructure as a new market category — one Rackspace is uniquely positioned to lead,” said spokesperson Cheryl Amerine after Rackspace signed its memorandum of understanding with AMD.
Rackspace did not comment on the layoffs as of publication time.
