With Rackspace Layoffs, Eyes Turn to Rising San Antonio Tech Economy

San Antonio—There’s never a good time to be laid off. But maybe some times are better than others?

Rackspace is cutting about 270 jobs in the U.S.—some 6 percent of its 4,500-person workforce—the company’s CEO Taylor Rhodes announced yesterday, almost five months after it was acquired by private equity firms for $4.3 billion. The layoffs went into effect yesterday, according to a Rackspace spokesperson, and more may come outside of the U.S.

“In a situation like this, it’s never pleasant, but if there’s a silver lining I’m glad it didn’t happen five years ago when there was nothing,” says Lorenzo Gomez, the CEO of the Geekdom co-working space in downtown San Antonio. “The ecosystem is better prepared for an event like this today.”

That ecosystem in large part started with Geekdom, which opened in 2011, providing office space, mentorship, and other resources to former Rackspace employees and other entrepreneurs who founded startups. Since, San Antonio has seen a relative tech renaissance, with many of the newly formed companies focusing on solving similar tech problems as Rackspace—background IT, cloud computing, or cybersecurity issues that Gomez describes as working in “the plumbing of the Internet.”

Those companies include startups led or founded by former Rackspace employees, or so-called “Rackers,” such as Jungle Disk, Promoter.io, HelpSocial, and Filestack, among many others. More recently, other tech resources have flooded the city, including more co-working spaces, new venture capital firms, coding schools, an accelerator program, an angel network, and a tech-focused high school.

The accelerator program, RealCo, could be a fit for any former Rackers with a startup idea, says partner Chris Saum. The program offers $25,000 to start for a six percent equity stake in a new business, providing advice on building the business, potentially more funding, and other resources in exchange.

“If there’s a want and a need and a real passion there—a determination—we’ll help you unlock it,” Saum says.

Geekdom is hosting a job fair with coding school Codeup on April 11, an option for Rackers who may be looking for a new employer, Gomez says, as well as startup events at the end of the month. Geekdom itself is offering any people who lost their job at Rackspace in the layoffs a membership at the co-wokring space ($50 per month) for free for up to six months, Gomez says.

“We’re trying to make lemonade out of this,” Gomez says. “I feel like we have a lot of real tangible resources for people exiting the business that they can at least have a starting point.”

In a blog post, Rhodes wrote that the layoffs, which mostly affected senior level management, were painful but necessary and manageable. The same can be said about the new ideas that spark innovation—though perhaps San Antonio’s tech community sees it as a little less painful when you have funding (and other resources) to help you.

David Holley is Xconomy's national correspondent based in Austin, TX. You can reach him at [email protected] Follow @xconholley

Trending on Xconomy