Rackspace, a San Antonio-based tech company, is cutting 15% of its global workforce, roughly 750 workers, as it shifts its focus to technology infrastructure and services for artificial intelligence.

Company Restructuring

The cuts are part of Rackspace’s new focus on managing cloud and data infrastructure for AI. The company has accumulated over $2.7 billion in total debt and saw a 2% year-over-year increase in revenues in the first quarter of 2026.

Rackspace’s board of directors decided on June 10 to terminate 15% of its workforce, which will cost the company between $14 million and $19 million. However, the cuts are expected to save Rackspace between $75 million and $85 million annually, which 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) to move toward building and operating the technology that runs AI programs for client businesses.

Original reporting: San Antonio Report — read the source article.