Rackspace scaling back the number of jobs it'll bring to SA? (San Antonio: leasing, home)

[Bo]

Article in today's Express-News discusses how Rackspace has quietly amended its grant agreement with the state of Texas to dial back the number of jobs it would create in Texas by the year 2012 from 4,000 to 1,225

Rackspace allowed to change grant pact (http://www.mysanantonio.com/business/Rackspace_allowed_to_change_grant_pact.html - broken link)

Earlier this week, Rackspace announced it was leasing a new datacenter in Chicago. This datacenter replaces the one planned for Windsor Park Mall.

Rackspace has 400 employees in 85,000 square feet at the Windcrest site that was competed during its first phase of renovation. When it's done with the second phase, it will have capacity for 1,600 employees and will become home to most of the employees now at its leased Datapoint Drive building

[wCat]

Ouch.

[Got3n]

gonna have to talk to my friend about this, he works there....i was supposed to be one of those jobs...

[tgannaway89]

I thought the original agreement required Rackspace to repay the incentive funds if they didn't meet their requirements?

[Paka]

Doesn't sound really positive if they are willing to place the bulk of their stuff in a much higher cost of living area...one would think that SA would be preferred for the ability to live so much more inexpensively than you could in Chicago...to enjoy the same standard of living that $100K would bring in SA, you would need to make $168K in Chicago. How does THAT help them in these financially troubled times???

[JsnSA]

Rackspace would not actually have much staff in the Chicago data center. First of all, data centers in general do not have much staff. They have a lot of space and require a lot of capital to build out, but they do not actually require much staff to run them.

The real loss of jobs would be related to the people employed to build out the data center, not the handful of people who staff it. But I could see why they would do that in today's economy because building a data center would cost a ton of money upfront whereas they can lease data center space for much less until the economy turns around.

From the article it looks like the amount of grant money they will receive has been dropped right along with their goals of how many people they are going to employ. They still have incentives to earn the original grant amount though if they live up to the original agreement. So there is still a chance they will end up adding a lot of employees in San Antonio. If anything, this shows that like everyone else Rackspace is not immune to the downturn in the economy.