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Rackspace CEO Confirms Layoffs, Several Hundred Jobs Cut In San Antonio

Courtesy of Rackspace

Rackspace CEO Taylor Rhodes made the announcement Tuesday on the Rackspace Blog, confirming the company is cutting 6 percent of its global workforce, about 198 of those in San Antonio.

President and CEO Richard Perez of the San Antonio Chamber of Commerce says he’s hopeful the technology workers being laid off at the cloud computing company will stay in San Antonio.

Perez says he understands several hundred of those jobs are being eliminated here.  He’s been told the positions are “from the top down,” and include senior level employees.  

“I think that if those folks are interested in sticking around that they will find a welcoming work environment here in other companies, startups, some of the larger companies that exist today.”

In anticipation of the layoffs, Bexar County commissioners on Tuesday approved $20,000 for a program to be overseen by Tech Bloc, an organization of area technology leaders and entrepreneurs.

The seed money is a down payment for a chief talent officer position. The person hired will connect available tech workers with smaller technology companies looking for employees.

Tech Bloc CEO David Heard says the program is designed to keep former "Rackers" in San Antonio.

"Largely the money is to hire an aggressive person who can hit the ground running do everything we can as a city to keep these people in our community. They have valuable tech skills. We don't want to lose them."

Rackspace went private in a $4.3 billion dollar deal with Apollo Global Management last November and announced it would cut spending by 7 percent in 2017.

Rackspace says employee compensation makes up more than half its expenses and it cut non-personnel expenses before laying off workers.

Paul Flahive can be reached at Paul@tpr.org
Shelley Kofler is Texas Public Radio’s news director. She joined the San Antonio station in December 2014 and leads a growing staff that produces two weekly programs; a daily talk show, news features, reports and online content. Prior to TPR, Shelley served as the managing editor and news director at KERA in Dallas-Fort Worth, and the Austin bureau chief and legislative reporter for North Texas ABC affiliate WFAA-TV.