Rackspace unplugs 250 staff to chase hot new products

Rackspace has revealed plans to trim six per cent of its workforce in the United States, and plenty of people elsewhere. CEO Taylor Rhodes blogged the decision in a post titled “Hard Things: Cutting Current Costs to Invest in Our Future”. The CEO positions the firings as a re-balancing act “focused mainly in areas where our …

[Potemkine]

What do you mean by 'utterly naive'?

I guess Mr Rhodes accepted a significant decrease of his own pay and benefits to show he makes sacrifices too?

[Dr Who]

Re: What do you mean by 'utterly naive'?

I ran a company years ago whose primary market was dying. What we should have done is made most of our staff redundant and changed the focus of the business to the bits which were making money (email systems and browser based software development).

Instead, we (the directors) took pay cuts and kept the staff on hoping against hope we could revive the loss making core business. This was the wrong thing to do. Our staff were talented and when we did eventually have to let them go they all very quickly found great jobs on better pay. It would have been much better for everyone involved, staff, management and shareholders to make the redundnancies early instead of hanging on. That's a lesson I never forgot.

There is an assumption that anybody who runs a business is a ruthless psychpath who treats people like meat. In the vast majority of cases the exact opposite is true, and it was because of our loyalty to our staff that we eventually had to wind the company up. As I say, it's a lesson I learned the hard way.

[quxinot]

Re: What do you mean by 'utterly naive'?

>There is an assumption that anybody who runs a successful business is a ruthless psychopath who treats people like meat.

Fixed that for you. Any halfwit can run a company into the ground, and I'm not going to list examples because that's too easy. All you have to do is claim that it's to "improve shareholder value" or some nonesense.

But I'm sure these CxO's are far smarter than not just each employee, but all of their employees. I wonder what would happen if they listened and kept their best people through thick and thin? No, that's stupid, a bonus today is worth more than anything tommorrow.