RACKSPACE TECHNOLOGY, INC. - Workforce Realignment

Rackspace Technology, Inc. announced a workforce realignment plan on June 10, 2026, approved by its Board of Directors. This plan aims to accelerate the company's strategic transformation in enterprise AI by de-emphasizing legacy services, particularly in the Public Cloud unit, and reallocating resources towards AI development and deployment. The realignment is expected to impact approximately 15% of the global workforce, with most affected employees notified on or around June 10, 2026, and further exits planned over the next six months. The company anticipates incurring one-time expenses between $14 million and $19 million, primarily for severance and related costs, expected to be recognized in 2026. Upon completion, Rackspace projects annualized run-rate savings of $75 million to $85 million. A significant portion of these savings will be reinvested in high-growth areas like AI solutions delivery and infrastructure, with potential for further operational optimization measures.