Rackspace Founder Says It's 'On Trajectory of Death'

Richard Yoo, who founded and helped build the website hosting company that became San Antonio's premier technology firm, believes he's watching its collapse. From a report: The reputation of the company now known as Rackspace Technology, he said, "is eroding rapidly" after years of shifting business plans, executive shuffles, financial losses, staff cuts and, finally, the Dec. 2 ransomware attack that left tens of thousands of customers without access to their email, contact and calendar data. "This is the beginning of the end," Yoo said last week. "It's already just a midsize business in San Antonio. This is not a company that's on a trajectory of growth. They're on a trajectory of death. It will not be around." He puts the blame for Rackspace's deepening financial struggles -- it's posted a steady string of quarterly losses, and the value of its stock has fallen 80 percent in the past year -- on its replacement of tech-oriented leadership with board members and managers "who don't have any connection with the product." He said there's "no culture" at the company after it laid off hundreds of local staffers while it expanded globally. And he scoffed at the idea of being a "Racker," saying he never adopted the term the company uses for its employees and identity.

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