SAN ANTONIO — Kevin Jones is out as CEO of
Rackspace Technology Inc.
and Amar Maletira, the cloud-computing company’s president and chief financial officer, is in, the company said Monday.
Jones, who had been CEO at San Antonio’s largest technology company since April 2019, is moving to a position with
Apollo Global Management
, which is Rackspace’s largest shareholder. Maletira will continue to serve as CFO until his replacement is named.
The leadership change, which was effective immediately, comes as Rackspace has been working toward a reorganization that includes splitting itself into separate business units for private and public clouds. Its aim is to increase the company’s profitability.
David Sambur, chairman of the Rackspace board, said Maletira’s experience in transforming tech businesses would benefit the company as it moves into its next phase.
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Amar Maletira was named CEO of Rackspace Technology Inc. on Monday, Sept. 26, 2022.
Courtesy of Rackspace Technology Inc.
“Over the course of his career, he has helped transform several multi-billion dollar technology businesses,” Sambur, co-head of private equity at Apollo, said in a statement. “He has also been instrumental in crafting Rackspace Technology’s new strategic direction and operating model. We believe his appointment as CEO will allow us to improve and accelerate the execution of our new go-forward strategy.”
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Jones will become an operating adviser with Apollo, the company said. He was not available for comment.
Reorganization
In May, Jones raised the possibility of selling parts of the company when conducting a strategic review after hearing from a potential buyer interested in one of its businesses. But last month, Rackspace said it had chosen not to sell itself. Instead, it said it was pursuing reorganization.
On a conference call with analysts and reporters Monday, Maletira said the plan was in place and Rackspace is now working to put it into place.
“Our leadership team is absolutely convinced that we now have the right strategy and the right operating model in place,” he said. “We simply must improve execution, focus and accountability. I assure you that is exactly why I stepped into this role and exactly the message I will send to every one of our leaders in the company. We have work to do.”
In an emailed response to questions later Monday, the company said the realignment into two business units — public cloud and private cloud — was on track.
“We are nearing the point where we can provide additional details on our go-forward game plan, including any additional decisions regarding the structure of the company, in November during the Q3 earnings call,” said Chief Marketing Officer Casey Shilling.
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Maletira joined Rackspace in November 2020 as president and CFO. Before that, he was chief financial officer at Viavi Solutions, a California-based software and hardware company. Previously, he had positions at Hewlett-Packard, a manufacturer and retailer of personal computers, printers, computer hardware and business solutions, including as CFO of enterprise services for Americas.
Rackspace history
Rackspace, founded in 1998, has its roots in hosting websites for clients. But by mid-2016, the company had lost about 60 percent of its market value amid fierce competition from heavyweights Amazon, Microsoft and Google.
That November, New York-based powerhouse Apollo Global Management took the company private in a $4.3 billion deal. Rackspace began working with the tech giants to help its customers move their data to both private and public clouds.
It also went on an acquisition spree. It spent $1.7 billion to acquire four businesses from 2017 to 2019. They included Onica, a cloud services and management firm, and Datapipe, a managed services provider for private and public cloud customers. It has said it strengthened cloud partnerships with midsize customers including Snowflake, Datadog, Cloudfare and Platform9, and attracted larger companies.
Apollo took it back to the stock market with an IPO in 2020. Its performance as a public company has been disappointing.
Last month, Rackspace reported a widening loss in the second quarter despite an 11th-straight quarter of revenue growth. Its loss increased 11 percent to $41 million from $37 million a year ago. Revenue increased nearly 4 percent, to $772 million from $744 million.
At that time, the company’s shares had fallen 60 percent as it continued struggling to find its footing. Monday, its shares were rising, and were up about 10 percent nearing the close of the trading day.