Rackspace Technology said it will be putting USD 65-70 million into aligning the company with its new strategy: developing cloud services and other growth initiatives. The money will be funding from an estimated USD 95-100 million in gross cost savings as a result of enhanced automation and the company’s restructuring programmes to move away from mature and declining areas of the market.
The company will specifically invest in cloud migration, elastic engineering, cloud native application development, data, artificial intelligence, machine learning and security services. it will also expand its internal training programmes to develop expertise in cloud engineering, data engineering, and cloud native software engineering. This will prepare existing employees to meet high-demand roles on the company’s fast-growing professional services and elastic engineering teams.
With this restructuration, Rackspace expects to take pre-tax charges of about USD 70-80 million over the next 12-24 months.
The company has now also increased its guidance for the second quarter, with revenues now seen at USD 741-744 million and the net loss at USD 30-50 million.
