Rackspace CEO Taylor Rhodes announced today in a blog post that the company is initiating layoffs that will reduce its U.S. workforce by 6 percent. Rhodes added that there also will be cuts outside the U.S., but to a smaller degree. The Rackspace layoffs will impact about 275 employees, according to the San Antonio Express-News.
In the blog post, Rhodes said the cuts will primarily occur in the corporate administrative and management areas where the company’s “workforce has grown more rapidly than our revenue.”
The layoffs aren’t a huge surprise. Three months ago Rackspace was acquired by private equity investor Apollo Global Management for $4.3 billion and is now privately held.
Rackspace has been facing increased competition from Amazon Web Services (AWS), Google, and Microsoft because those firms were able to offer cloud services for lower prices. However, the company has been trying to alter its business model and has partnered with AWS and Microsoft to make it easier for enterprise customers to set up private OpenStack clouds.