Rackspace Technology Layoffs: Why The Firm Is Cutting 15% Of Its Workforce

Aha! Another one bites the dust. Rackspace Technology, that plucky little cloud services firm that once promised to help businesses with 'fanatical' support, has decided the best way to embrace enterprise AI is to give 15% of its employees the heave-ho. The company is 'pivoting,' you see — because nothing screams 'cutting-edge AI strategy' quite like a 15% workforce reduction. It's the kind of pivot that would make a ballet dancer dizzy, but for shareholders, it's a smooth move.

The firm expects to save up to $85 million annually from these cuts. That's $85 million that will no longer be spent on salaries, benefits, or those pesky human things like coffee breaks. Instead, the money will presumably be reinvested in 'enterprise AI,' which in practice means licensing some model, slapping a dashboard on it, and calling it a transformation. Meanwhile, the thousands of employees being let go can console themselves with the knowledge that their livelihoods have been sacrificed on the altar of a quarterly earnings bump.

This is, of course, the same song we hear every quarter from tech firms — 'we're pivoting to AI' is the new 'restructuring to focus on core competencies.' Rackspace joins a long and growing list of companies using artificial intelligence as a pretext for cost-cutting. The irony is that the very people who built and maintained the cloud infrastructure that makes AI possible are now deemed expendable by it. If this is the future of enterprise AI, the future looks an awful lot like a severance letter.