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A little more than two months after Rackspace installed a new CEO, several of the company’s executives are packing their bags.
In April, the managed cloud services company announced the departure of CEO Joe Eazor, with Kevin Jones taking over the top executive role.
Now as Jones gets set to make his imprint on the Windcrest-based enterprise, Chief Financial Officer Louis Alterman, Chief Operations Officer David Meredith, Chief Marketing Officer Mark Bunting, and Gerard Brossard, general manager of Rackspace Solutions and Services, have departed, Rackspace confirmed.
Meredith’s departure was announced in June when the former Racker was tapped to lead software firm Everbridge. However, Bunting left the company last week. Alterman and Brossard remained on Rackspace’s leadership team page as of Monday afternoon.
In a statement, Rackspace said it plans to announce its new executive team in the coming weeks.
“Rackspace has tremendous market opportunity and is in a period of rapid transformation,” the company said. “As we announced in May, Kevin M. Jones has joined Rackspace to accelerate the value of the cloud for our customers. Kevin has announced his next-generation leadership team in San Antonio and globally that will help the company take full advantage of the opportunity to help customers on their cloud journey.”
Jones left Dallas-area transit provider MV Transportation to join Rackspace. He has previously worked at IT companies such as Dell, Hewlett Packard, and DXC Technology.
The shakeup comes amid rapid turnover at Rackspace since the company went private in 2016. The company has had three CEOs in the past three years. Taylor Rhodes, who led the company during its acquisition by Apollo Global Management in November 2016, left in 2017 and was replaced by Eazor.
The outgoing executives all joined the company in 2017 or later. More than a dozen executive appointments were made during Eazor’s tenure, which lasted less than two years.
After marking its 20 anniversary late last year, Rackspace has made several high-profile business decisions in 2019, beginning with a 3 percent reduction of its workforce in February, which the company said was part of a “realignment” of its workforce. It was the third round of layoffs since the company went private. The company also refreshed its branding, opting for a bolder red and a lowercase “r” as its logo.
Influencing the leadership shakeup and some of the company’s cost-cutting measures of late is the desire for Apollo to recoup its $4.3 billion investment in Rackspace, said co-founder Dirk Elmendorf, who left the company in 2009.
As Amazon, Microsoft, and Google have stepped into the cloud computing arena, Rackspace has struggled to regain the market share it once possessed and ultimately adopted a strategy of helping clients who use such cloud services as Amazon Web Services, Microsoft Azure, and OpenStack manage their cloud infrastructure. Rackspace’s profitability has increased of late, but Elmendorf said the company will strain to grow its cash flow while burdened by debt.
“They’re not cold, heartless bastards,” Elmendorf said of Rackspace. “They have a cold, heartless taskmaster riding them [to] innovate, grow, and feed the debt machine. Any one of those is hard to do. Doing them all at the same time takes real mastery.”