
Rackspace announces it has laid off 200 workers - doppp
https://techcrunch.com/2019/03/01/rackspace-announces-it-has-laid-off-200-workers/
======
jasonjayr
Oh man. I've had a VPS with them since before they acquired SliceHost, and
have been paying a (way overpriced) $20/mo for a SINGLE 512mb server just
because the IP reputation is super squeaky clean, as it's my mail server.

They just announced a $5 hike in price this month for "fanatical" support, I
haven't opened a support request with them in eons:

> _In July 2014, Rackspace introduced a minimum support fee of $50 for all new
> accounts to offset the rising cost of providing Fanatical Support. Legacy
> accounts like yours were unaffected by this change, keeping your previous
> rate without a support fee for the past four years. Effective February 2019,
> you will see the addition of a $5 support fee on your invoice._

I've been grooming a elastic IP @ AWS for the last year, and rackspace is
getting dropped this week.

~~~
fyfy18
What tools do you use to monitor IP cleanliness? I monitor mine with free
blacklist monitoring tools, but a lot of my emails to corporate addresses end
up bouncing. The rejection message often gives a generic error so I'm not sure
if that's my fault or not.

~~~
jasonjayr
I use the free tools as well, but most of the folks I consult for, I also
administer their mail account server @ Google or Microsoft, so I can keep an
eye on both sides of the transaction. Implementing SPF/DKIM/DMARC/smtp-tls
also helped keep things clean. You can register as a postmaster @ AOL,
Microsoft & Google, and also get reports if something is reported as spam.

A well behaved remote mail server should either reject/bounce the message, or
deliver it to a user's spam folder, it should never just drop it.
Unfortunately, It's near impossible to determine if your message ended up in a
user's spam folder :(

My server sends 50-100 messages a month, tops, and I never send mass messages,
just direct messages to family, friends & customers. The biggest issue I had
was when Rackspace periodically (+ voluntarily) reported their VPS IP space to
Spamhaus, which required me to inform Spamhaus that I was responsible for that
specific IP, and it should not be on the blacklist.

~~~
rsync
"I use the free tools as well, but most of the folks I consult for, I also
administer their mail account server @ Google or Microsoft, so I can keep an
eye on both sides of the transaction."

Is this new ? I have been part of discussions on HN about personal mail
servers for ... 8 years ? This is the first I have heard someone mention
registering their mail server with google ...

~~~
jasonjayr
Search for "Google Postmaster tools" or check out

[https://postmaster.google.com/managedomains](https://postmaster.google.com/managedomains)

You don't have to register per-se, but you get access to reports for your
domain so you can see any potential trouble.

------
crikli
Their service level went from amazing to awful once they were purchased by
private equity. As a result after having been Rackspace clients since 2007 my
company started moving our clients away from them over 24 months ago and
finished November of last year.

I very much miss when their support truly was fanatical.

Edit: duration of service, clarity

~~~
grecy
I have a dedicated linux VPS with them and use their CDN a lot. The prices
seem so high, I'm considering moving.

Any suggestions?

~~~
mdasen
There's the usual suspects like AWS, Google Cloud, and Microsoft Azure. If
you're just looking for a VPS, DigitalOcean is cheap and easy.

~~~
jdhawk
and Linode.

~~~
mifreewil
I’d stay away from Linode. They’ve had so many major security issues over the
years that at this point they are like the Yahoo Mail of VPS in my mind.

------
zeta0134
I happen to work for Rackspace at the moment, and I'm really disappointed that
I keep hearing about these things in the news first. Ever since we went
private, all the upper management changed and we've kinda been kept in the
dark, which is a big giant red flag. I think it might be time to polish up the
old resume.

~~~
askafriend
Don’t even think twice. Polish that resume and jump. The market is hot and
life is short.

~~~
redm
Uh, you should always think twice, the grass isn't always better on the other
side and you know nothing more about his/her circumstances.

~~~
tedivm
We know he's working for a company where management doesn't communicate and
layoffs are happening.

Polishing off a resume doesn't mean immediately quitting either- it means
going out to look at other opportunities. There are very few scenarios where
being aware of other options is harmful.

------
seltzered_
Previous layoff discussion from feb 2017 (~200 too):
[https://news.ycombinator.com/item?id=13593416](https://news.ycombinator.com/item?id=13593416)

Supposedly this is an annual thing now: [https://www.tpr.org/post/third-year-
row-february-rackspace-l...](https://www.tpr.org/post/third-year-row-february-
rackspace-layoffs)

~~~
tyingq
So annual rank/stack, bell curve, fire x%. Right after performance reviews,
and right before any annual raises.

Typical slog of working at a recently PE purchased company.

I wonder if anyone talented is left. Usually they get sick of it after a year
or two. I would guess little to no real RSU handcuffs. The stock was badly
underwater before it went private.

~~~
raxthrowaway0
> So annual rank/stack, bell curve, fire x%. Right after performance reviews,
> and right before any annual raises.

Except we hadn't completed ours yet, this event was planned for several months
due to leadership expecting double-digit turnover after the performance review
period, about 10% of leadership in a single product got wind of it coming and
has already settled in at new companies, multiple principals and architects
with spotless records were let go from a single product along with nearly 80%
of its other headcount, and layoffs have been quietly happening without
attention being drawn (a few a week). We were also told at an Open Book that
Apollo had to intervene for Rackspace to afford contracted bonus structure
this year, as Rackspace literally did not have cash on hand to meet targets.

Other than all that, though, astute insight and analysis. You're right, just
typical fiscal year slog. (PR is literally saying "we're a stable company,
promise" in statements.)

~~~
tyingq
I wasn't saying Rackspace was in good financial shape. I was saying it
probably sucks to work there, as it usually does in a "recently purchased by
PE" company.

~~~
raxthrowaway0
You were saying the layoffs are "typical slog," going so far as to
authoritatively declare how the layoffs that impacted us were executed.
(Completely wrong.) I was merely reminding you that from the outside, you have
extremely little context on which to speak authoritatively. You also cannot
speak authoritatively on working conditions; Rackspace was a great place to
work with little involvement from Apollo, despite your armchair theorizing
regarding a place you've never been.

Especially when the people who had been given assurances by ELT and then woke
up Thursday to find they'd been broken on account of near insolvency of the
business, when those people are hanging out in the comments among you, it's
probably best to listen more than speak.

~~~
tyingq
Sorry, no. You're reading something into what I said. I'm using "slog" to mean
"long shitty period".

I was guessing review/stack/rank at the beginning of the year because I've
spent time working at recently PE bought company, and quit once I saw the
pattern.

When do managers write reviews? They don't have to be delivered to the
employees before rank/stack/layoff...

~~~
raxthrowaway0
Great, now you're asking questions.

My manager was terminated before he could complete reviews for his staff (he
was forbidden from telling any of us about it, because they wanted us to be
surprised we were being fired, so my immediate manager just up and vanished
one morning). His manager, and that person's manager both turned over from the
company weeks ago after they were given a courtesy notice of this event
coming. Rackspace then reacted to the turnover and forced the highest manager
mentioned so far to stay and personally fire everyone.

I understand that you think your theory regarding this layoff is correct. It
is not. Performance reviews had absolutely nothing to do with this event. At
all. This event involved cost center.

Proof I'm legit: The meeting invite to fire everyone was called "Business
Update," and scheduled by Liana Greenberg on behalf of Scott Crenshaw. They
fired 30 at a time, then quickly cleared the room for the next batch.

~~~
tyingq
My "theory" was a summary of what I read in the linked article in the comment
I replied to, and based on similar experiences I've had. It's not a big
stretch to assume 3 consecutive years of single digit percentage layoffs, in
the same month, at the beginning of the year...might be stack rank activity.

------
cimmanom
I wonder if there’s room in the market these days for a new managed dedicated
hosting service like Rackspace used to be, where you paid significantly more
than for an unmanaged server (or a “managed” server that basically just gets
OS security patches) so you could instantly reach an expert sysadmin to fix
any problem with your servers.

~~~
stevekemp
That's the problem; hosting is a commodity these days. 90% of people who want
hosting only compare based on price. It's hard to justify paying "real staff"
high wages when the margins are razor thin.

Big hosts can survive by essentially offloading support, and making as much as
possible self-managed by the end-user.

The non-technical people who just want "a server that works" won't, broadly
speaking, pay a premium for that. They're non-technical and will eat up
support-hours too, asking questions about setting file permissions on
Wordpress.

~~~
mgkimsal
this seems like ... race to the bottom perhaps? or prisoner's dilemma? or some
other catchphrase to describe a common market problem.

If _everyone_ just charged some basic $ for support, it would generally get
better. I'm perplexed and sometimes shocked how much 'free support' people
expect - and often "get" to some degree - by cheap hosts. I'm in some WP
support forums on facebook and... man - what people expect for $10/month is
crazy. And... the amount of bs misinformation and half-truths being spread by
'experts' in those forums in crazy too.

Add in 'authoritative' sites and experts 'recommending' (via affiliate links)
bluehost/godaddy/siteground on a recurring basis, and we've got this...
again(?) - race to the bottom?

People will post how 'awesome' the support is because some remote people spent
15 minutes walking them through file permission setup amazes me.

Oh... and "free migrations" between hosts. Then when there's a real issue -
like 6 of the 38 plugins don't actually work on the new host, and the new host
says "this will be $75 to make it all work" people are _outraged!_ and
publicly slam everywhere they can. Then someone else promises unlimited XYZ,
they move, and the cycle starts again.

Finally... liar/cheats/scumbags who intentionally rip people off on top of all
that (I think some of the ripping off isn't always intentional, just
misinformed) makes people even more wary of trusting genuine people.

I may have just described half of the history of human society, unrelated to
hosting, but.... I've watch this market grow over the past 20+ years, and it's
just so... weird.

~~~
TBurette
You could say it's a 'lemon market' (
[https://en.wikipedia.org/wiki/The_Market_for_Lemons](https://en.wikipedia.org/wiki/The_Market_for_Lemons)
).

A lemon market is when the buyer doesn't have enough information to tell the
difference between a good product (peach) and a bad one (lemon). Since the
buyer can't tell the difference, the price he is willing to pay will end up
somewhere between the value of the peach (more expensive) and the value of the
lemon (cheaper). What happens then is that the sellers of lemons thrive while
the the sellers of peaches end up leaving the market. This lowers the average
price and creates a cycle where the price decreases which drive even more
sellers of quality products to leave the market which lowers the price
further...

~~~
mgkimsal
Thanks!

------
Theodores
Rackspace had it good with the little incentives they gave to web agencies.
The agencies would build websites for companies that didn't really need $$$
servers as they were new to being online and didn't have the customers yet.
Rather than recommend sensible hosting that could scale, e.g. a VPS that had
the RAM, CPU, disk and bandwidth low to start with and an option to upgrade
later, the agency would sell the newbie client the gold plated Rackspace
solution. What wasn't discussed with the client was how Rackspace would cough
up a handy referral fee whereas the price competitive VPS would not.

I felt bad for clients that had been suckered with that cost burden,
particularly if the customers did not show up after go-live. It was like the
online equivalent of them being lumbered with a giant mall when they needed a
prominent spot on the High Street.

Nowadays though services like AWS have taken on this agency provided hosting
setup.

~~~
raxthrowaway0
You are aware that pretty much every hosting organization in existence pays
referral fees, yes? Including "cheap VPS that can scale" (also known as: a
contradiction in terms).

[https://www.linode.com/referrals](https://www.linode.com/referrals)

[https://www.digitalocean.com/referral-
program/](https://www.digitalocean.com/referral-program/)

[https://www.vultr.com/news/Summer-Promo-Now-
Earn-%2430-For-E...](https://www.vultr.com/news/Summer-Promo-Now-
Earn-%2430-For-Every-Referral/)

You're also clearly unaware that Rackspace built itself and went public on
colocation, which dates your perspective. "What type of servers to use" is
such a variable question for each outfit, and even with a web-focused startup
perspective like this one, there's so much variance in work that colocation
often made sense at the time. Time sharing a VPS with Bob's IRC Vhost Service
often does not.

~~~
commoner
A "cheap VPS that can scale" is not a contradiction in terms, since hosting
providers like DigitalOcean, Linode, and Vultr do indeed offer cheap VPS
hosting options with adequate performance for small sites, as well as more
expensive options suitable for high-traffic sites.

The parent comment makes a valid point about performance-to-price value.
DigitalOcean, Linode, and Vultr currently offer much more value for the newbie
client (and for many other types of customers) than Rackspace does at the same
price point.

~~~
Theodores
The problem was that you have two parties - the agency and also Rackspace -
somehow selling a customer wanting to get their business online something that
was not the right product for the job. Imagine a small clothing boutique new
to the market and reselling other branded stuff. You know from the get go that
they are not going to be getting the same level of traffic as an established
retailer, you also know from developing the site for them how the server needs
to be to give the page speed needed. You also know that the performance
bottlenecks are not going to be solved with the gold plated server when you
hit a go slow situation. However, if you are a mere developer and think that
it would be easier to maintain the site and scale it later then it might as
well be like your own Ubuntu box with pretty much the same configuration and
that nice easy firewall that you get with Ubuntu.

Yet despite having a good idea of the requirements the project manager who has
never coded in his life always gets clients a Rackspace box with enterprise
Redhat and some horrid cPanel on it with some extra firewall box. These things
hamper the go-live as if you come from Ubuntu then Red Hat always feels like
it is a generation out of date with things turned off by default when you need
them on. Then there is a cPanel sea of icons when all you need is an ssh
terminal and 'apt-get'.

Some friction goes on because, as a developer you wonder how it is that you
are not being listened to. Then one day it all becomes clear. There is this
matter of a kick back which is a few hundred which is not really worth it for
the hassle caused. If you are on the side of the client and you know full too
well that they don't need to be paying out a grand a month for the few dozen
sales they are getting in a week then you can't help but feel negative about
Rackspace. The sales person at Rackspace has time and money to wine and dine
your clueless middle manager whipping boy, but can't advise on a more sensible
solution for your clients.

Eventually the clients move on to another agency because your agency have only
thought of the 'go live' and no support beyond that, so in turn, Rackspace
lose another customer once the expensive project has been torn to pieces and
rebuilt by a better agency who charge the client for support instead of
useless hosting that they will never get to need.

I am sure this is a scenario that was quite common a few years ago. Nowadays
not so. Apart from anything else small businesses can just setup a Shopify
website and be online by teatime rather than be bamboozled by useless web
agencies.

------
jimmywanger
I used to work for rackspace. I'll answer any questions you might have, this
was 2 years ago.

My take is that they were pivoting HARD away from the server business and
trying to provide "cloud architecture solutions", where they would tell you
how to properly set up your GCP and Amazon clouds to fit your needs.

From inside the company, coming from the silicon valley, the culture was
rather jarring. They're from San Antonio, and try to hard to be hip and
silicon valley-ish, but it's just in the uncanny valley where everything is a
little bit... off. Also, it might be the corporate culture in San Antonio, but
they try really hard to incoporate the new employees into "the family". For
instance, all new employees have to get flown to San Antonio for a week of
team building exercises and orientation. To me, it almost seemed culty.

~~~
orestis
Any opinions on that cloud architecture solution service? Would you recommend
it for a company with very little AWS experience?

~~~
jimmywanger
Bear in mind they've only started this initiative about 2-3 years ago.

Cloud architects are hard to come by, and hard to pry away from their existing
jobs.

Think about whether or not your want to pay Accenture marketing rates to get a
junior employee who just started, because knowing what I know about the pay
scale, if anybody gets some expertise in Cloud Architecture and has some
contacts in tech, which is quite likely because he's talking to clients, he's
probably going to jump ship for a company that pays better.

------
ratling
That company cannot implode fast enough. I will never do business with them
again after they hell they put me through (twice) with their inherently broken
security model

Rest In Piss.

------
new_guy
So they laid off 200 workers but they now have 200 job openings?

Why not just retrain existing workers instead of laying them off? Stuff like
this seems like the quickest way to kill morale and run the business into the
ground.

~~~
quacker
Agreed but job openings in different areas most likely. Hypothetical example:
you lay off 200 developers and want to hire 200 sales/marketing folks. Devs
don't want to be retrained in marketing (I sure wouldn't).

But, also consider that the PE firm doesn't care all that much. They just need
to make the numbers look good, so they replace highly paid veterans for
cheaper junior workers. And ultimately, they force the company into treading
water with a smaller/cheaper workforce which makes the numbers look good in
the short term so they can sell it. Sucks for the company though.

------
christophilus
I've got some old projects running on Rackspace. Did you move away from
Rackspace? If so, where'd you move, and how do you like it?

~~~
thrownaway954
For Windows... Hosting.com

Hands down expensive as hell but AMAZING support.

For Linux... Inmotion Hosting

Reasonably priced, but UNBELIEVABLE support.

Seems like everyone working at these two companies is a wizard that put on
their robe and hat before work. When you pay for hosting you want someone on
call and smarter than you for when things go south.

~~~
zelon88
I'm gonna have to disagree with you about InMotion.

Their infrastructure _feels like_ using a couple of half disassembled servers
on the floor. Their platform is fragmented to pieces, they have no idea what a
"design system" is, and you have to log into like three different webapps to
just play around with your server.

They are literally in the same place they were in on day one, playform wise.

If you're nostalgic for some 2006 era hosting company, go with InMotion.

~~~
walterbell
What is missing? Does their infrastructure work?

------
bitzun
I heard from someone inside that at least one office's developer reqs were all
moved to India, inducing a pretty big morale hit.

~~~
exUKRacker
All backfills and new support roles are going out to India and Mexico

------
exabrial
Rackspace is sort of mind blowing. They were first to market, had excellent
personable customer service, yet somehow now the early lead with a lack of
broader vision and ambition.

~~~
zelon88
That's ultimately what this seems like.

Unfortunately from reading some of the comments it appears that private equity
took over RS at some point and now it's just gonna be their cash cow until
they go bankrupt.

They haven't done much innovation wise in years. Its really sad.

------
jimmydddd
Are there any examples of companies bought by private equity firms that did
not go down the drain? On the retail side, I recall Toys R Us and Sports
Authority being examples of companies recently folding after the PE firms were
enriched.

------
linkmotif
Does this affect mailgun? Is that a profitable revenue stream for them?

~~~
burlesona
Mailgun spun off a while back and isn’t Rackspace anymore.

~~~
linkmotif
Still thought it had the association some how.

~~~
Shakahs
Based on traceroutes and IP ownership Mailgun appears to have migrated mostly
to AWS (web app, DNS, SMTP relay) but still uses some Rackspace
infrastructure; emails delivered from my Mailgun account come from the
Rackspace data center in Chicago.

~~~
linkmotif
Thank you

------
iandanforth
Are these people under non-competes? I see a dozen customers for a competing
(read: "clone") company with 'fanatical' support in the comments.

~~~
kazanz
There are companies out there. I work at one of them, www.hivelocity.net. We
provide the managed services and support everyone is talking about in 8 US
cities. One of the primary reasons we are in business is the technical experts
on staff that are constantly helping our clients, which is obviously
expensive.

I think the issue you don’t see “pop up” competitors is the inability to
market “great support” empirically. There is a lemon market comment somewhere
that is dead on. You can have all the high cost experts on staff but Everyone
is going to think your marketing is full of it until they try your services or
are referred via word of mouth.

------
patrickg_zill
So the decline into Burst.Net territory has begun...

------
ykevinator
I never understood why they existed. They charge $1,000 for a $50 server and
there service is as good as Amazon.

~~~
cimmanom
They used to be amazing. 15 years ago if you rented a server from them you
were getting a sysadmin into the bargain. For companies without that expertise
in house (or who didn’t need enough to justify a full time position) and for
whom shared hosting wasn’t an acceptable alternative, they were the perfect
option.

~~~
mgkimsal
Early on, their deal was that when you called, you always got a human. 24x7. I
called early Sunday morning. Human after 2 rings, transferred to the correct
dept within 15 seconds, to another real human, who took acknowledged and took
care of a tech problem within a few minutes.

I'm not sure there's _any_ place you can get that sort of service now, which
is part of the reason I run my own servers and dug more in to sysadmin stuff.
Yes, my stuff's in a remote data center, and I can't physically touch it.
Assuming there's a dumb pipe coming in, I can handle everything else (or find
someone who can) - I don't need handholding service bundled in to a price.

~~~
CydeWeys
That level of service is definitely available when you're talking enterprise-
level contracts, but those are worth much more than $1k/month. At only
$1k/month you aren't going to get that kind of service in many places.

~~~
scarface74
You can get that level of support for a minimum of $100 or 10% of your bill on
AWS. Their support is excellent. You could always pay for a dedicated host
with AWS and reserved pricing.

~~~
runako
Is this really true? I've never had this experience with paid AWS support,
even spending a lot more than $100/mo (although not as much as Lyft).

Rackspace support ca. 2004 was really fanatical. Like you could call them and
get an engineer on the line, working on e.g. your RAID card, in minutes.
Without going through a ticketing system or other intermediaries. Some of this
was no doubt due to them being a smaller company, but "Fanatical Support" was
not just marketing hype.

~~~
scarface74
Most issues I’ve used AWS support for were because of my own lack of
knowledge. But they are batting 100 so far. I usually use chat.

So far they have helped me with:

\- S3 permissions loading files to RedShift and Aurora

\- binary file support with API Gateway and lambda with CloudFormation

\- a cross account Code Pipeline with CodeBuild, Code Deploy and
CloudFormation - ended up you can’t do it fromthr vonfold.

\- some problem a coworker was having with DAX (DynamoDB cache) with Python.

------
gcb0
I call it the yahoo fenomena.

buy a lot of stock on number one (google, or Amazon in this case), then use
your money or previous position on number two or three company in the same
market to influence the board to drive the company value to the ground. now
you can claim loss on the secondary position while creating a bigger
monopolistic market for your main position for the long run.

------
qrbLPHiKpiux
Looks like they're going after a more high-caliber employee, cutting the
"weak-links" they have now.

~~~
jpmontez
The people that were fired are high-caliber. I know a few that literally wrote
the books for their field.

