Rackspace Technology is going all-in on AI infrastructure, and it’s paying for the bet by cutting roughly 15% of its global workforce. The company formalized a definitive agreement with AMD to deploy an initial 30 megawatts of AMD-based AI compute across its global data center footprint, with rollout beginning late 2026 and extending through 2028.
RXT shares surged more than 25% in premarket trading following the announcements.
The deal and the cuts
The AMD partnership builds on a Memorandum of Understanding signed on May 7, 2026, and targets sectors where regulatory oversight is heaviest: healthcare, finance, and the public sector. The deployment will lean on AMD’s Instinct GPUs, EPYC CPUs, and ROCm software suite, essentially giving Rackspace a full-stack AI offering from silicon to outcomes.
The workforce reduction, approved by Rackspace’s board on June 10, 2026, is the other half of the equation. The company expects annualized savings between $75M and $85M from the headcount cuts, though it will eat one-time charges of $14M to $19M this year to make it happen.
