Rackspace cutting 6% of U.S. workforce





Click ahead to view Bexar County businesses with the most layoffs in 2016. less A 2011 aerial of Rackspace Hosting Inc.'s headquarters in the former Windsor Park Mall in Windcrest. The company is trimming its workforce, according to two people familiar with layoffs.



Click ahead to view ... more A 2011 aerial of Rackspace Hosting Inc.'s headquarters in the former Windsor Park Mall in Windcrest. The company is trimming its workforce, according to two people familiar with layoffs. Photo: San Antonio Express-News /File Photo Photo: San Antonio Express-News /File Photo Image 1 of / 18 Caption Close Rackspace cutting 6% of U.S. workforce 1 / 18 Back to Gallery

Rackspace Hosting Inc., which was acquired just three months ago for $4.3 billion by a New York private equity firm, is trimming 6 percent of its U.S. workforce and more overseas, the company confirmed today.

The layoffs, which began this morning, will affect at least 275 employees of its more than 4,600 U.S. employees with “somewhat smaller reductions in our offices in other countries,” CEO Taylor Rhodes said in a blog post.

Rhodes said the layoffs were “personally painful, but they are necessary and manageable.” He added that the cuts won’t affect the company’s expertise or customer service. The company is cutting jobs in its corporate administration and management teams.

News of the cuts first appeared on Reddit this morning, with “techmaster210” reporting that about 500 workers were being laid off. Another person on Reddit said the cuts were closer to 300, with 200 in San Antonio.

Video: Apollo Agrees to Buy Rackspace in $4.3 Billion Deal

The managed cloud company was taken private in November by investment firm Apollo Global Management.

Apollo is known as a seasoned corporate turnaround player, breathing new life into faltering companies like Hostess Brands. Apollo bought the Hostess Brands cake business out of bankruptcy in 2013 with financier C. Dean Metropoulos for $410 million. They brought in new management and restarted operations that had gone dormant, putting the iconic Twinkie back on grocery store shelves. Hostess has since gone public, and has a current market value of about $1.85 billion.

It’s common in leveraged buyout transactions for the acquiring company, which often takes on a lot of debt to complete the deal, to restructure operations and reduce expenses.

At the time of the transaction, Rackspace had 3,741 employees in San Antonio and 4,876 in the U.S. Its global workforce was more than 6,200 employees.

Go to ExpressNews.com later today or Wednesday’s newspaper for more details on the Rackspace restructuring.

pdanner@express-news.net

Twiter: @AlamoPD