Rackspace secures $75M-$85M in annual savings from AMD AI compute deal while cutting 15% of its workforce.
Rackspace Technology (RXT) shares surged 27% after announcing a 30 MW AI compute deployment agreement with Advanced Micro Devices (AMD), which also rose 1% premarket. The deal targets high-performance AI infrastructure for regulated enterprises, including clinical AI and enterprise inference solutions.
The company expects one-time restructuring costs of $14M to $19M but anticipates $75M to $85M in annual run-rate savings upon full implementation. Rackspace plans to reinvest much of the savings into high-growth areas like enterprise AI infrastructure while shifting resources from legacy services.
Rackspace will cut 15% of its workforce as part of the restructuring, prioritizing forward-deployed engineering and AI solutions delivery.