This is a strategic move to get out of “Public” cloud offering and move to a Hybrid model.
According to a report by the San Antonio Business Journal on Tuesday, it is undetermined whether these employees will be laid off, but Rackspace said that the company regularly shuffles employees, which it calls Rackers, to “fast-growing areas” of its business “and may from time to time eliminate some roles in areas” it chooses to reduce investment. The company has more than 6,000 employees.
Rackspace said it is placing employees in public cloud marketing and engineering into private and hybrid cloud computing departments in preparation for a slow-down of new signups for its OpenStack public cloud service as more new public cloud workloads head towards AWS and Azure.
In an email to The WHIR, a Rackspace spokesperson said: “At Rackspace, we regularly align Rackers to fast-growing areas of our business and may from time to time eliminate some roles in areas where we choose to reduce our investment. We help Rackers, whose roles are eliminated, try and find new roles within the company and many do so. We anticipate that our 6,000-plus Racker workforce will continue to grow this year.”
The public cloud market has been unkind to companies that challenge AWS and Azure, with Verizon being the latest firm to duck out of the running by shuttering its public cloud service. In the last year, Rackspace has shifted its focus to partnerships, such as its recent partnership with Red Hat, which help it offer clients a hybrid cloud solution. In October, Rackspace began offering support for AWS, noting increased customer demand for such a service.
Rackspace CEO Taylor Rhodes told investors on a recent earnings call that its OpenStack private cloud is growing in the “high double digits.”
Despite the restructuring, Rackspace told investors that it expects its workforce to grow this year.