Rackspace has announced it will is cutting hundreds of jobs worldwide, although its frontline cloud support and product teams will be unaffected.
In total six per cent of its US staff are set to be cut, around 275 roles, while reports suggest another 500 jobs from operations outside the US are also set to go.
Rackspace CEO Taylor Rhodes wrote a blog post explaining the rationale for the cuts, and said most of the roles going are in management and admin divisions.
"We have targeted these cuts primarily toward our corporate administrative expenses and management layers, while striving to create the least impact to our frontline Fanatical Support and product teams," he said.
"Our U.S. layoffs are focused mainly in areas where our workforce has grown more rapidly than our revenue."
Rhodes went on to explain that the cuts were being made to allow the company to put more focus on to the areas that are growing rapidly, chiefly its work helping manage businesses move to the cloud and subsequent management.
"More and more companies are asking us to help them tap the power of the cloud without the pain - without the expense and complexity of managing it all themselves," he wrote.
He said freeing up revenue by reducing headcount would allow the company to plough more investment into these areas, which should boost growth too.
"We are not backing down, but racing ahead. We expect that over a period of several years, Rackspace will be significantly larger in revenue, profit and headcount."
Rhodes also touted the fact that as Rackspace is now in private ownership, after a $4.3bn buyout from Apollo Global Management last year, it is able to make these cuts without having to worry about short-term market pressures.
"Apollo is giving us the flexibility to structure our business for long-term growth, in ways that would be difficult under the 90-day shot clock of the public markets."
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