SAN ANTONIO – The city of Windcrest is losing one of its largest employers as Rackspace Technology plans to relocate its corporate headquarters from the former Windsor Park Mall into a smaller space in North San Antonio.
Windcrest Mayor Dan Reese confirmed Oct. 21 that, after 14 years, Rackspace plans to exit the roughly 1.6 million-square-foot structure in 2023.
“We were informed this morning,” Reese said. “They met with me first and we’re working through the details.”
The financial ramifications of the move remain unclear.
Like many companies, part of Rackspace’s workforce has moved to a remote model since the outbreak of Covid-19 in March 2020. That contributed to the decision to relocate to a smaller building, according to Reese.
Casey Shilling, chief marketing officer for Rackspace (Nasdaq: RXT), said the company plans to relocate its operations to Ridgewood Plaza II, where it plans to occupy between 75,000 and 90,000 square feet of space.
No date has been set for that move, Shilling said.
Reese said leadership indicated Rackspace wanted to relocate to an area closer to where most of its workforce lives. Shilling confirmed that was indeed a factor in deciding where to move its headquarters.
The City of Windcrest has some insulation in the form of a master economic development and incentive agreement with the company. Reese said the company has indicated it intends to honor that deal, but how that will play out is not yet clear. He did say the city could receive some compensation as a result of the company’s departure.
“We’re going to work with them to do the best thing for Rackspace and also for the city,” Reese said.
It’s uncertain what will become of the Windcrest real estate.
“They have indicated they’re going to work with us to see what we can do to transition that building to something that would be obviously useful to the city,” Reese said.
Late last month, the Business Journal reported that CEO Kevin Jones was stepping down, effective immediately. Amar Maletira, the company’s president and chief financial officer since November 2020, has taken on Jones’ responsibilities.
In 2021, Rackspace pivoted from a private-equity-owned company to a publicly traded organization.
The Business Journal will have more on this developing story.
Editor’s note: This story was published through a partnership between KSAT and the San Antonio Business Journal.