Data Center Giant Equinix To Cut Hundreds Of Jobs

Citing new strategic priorities, data center REIT Equinix is laying off 3% of its global workforce.

The job cuts, first reported by Light Reading, will impact around 400 employees and include the elimination of 87 positions at the firm’s headquarters in Redwood City, California. Equinix expects to complete the staff reductions by early December.

Equinix, the world’s largest colocation operator with 260 data centers globally, is reducing its workforce at the height of an unprecedented data center boom that has pushed hundreds of billions of dollars into the industry’s coffers and driven vacancy rates in major markets to record lows south of 3%. The cuts come less than a month after Equinix posted third-quarter earnings results that exceeded Wall Street expectations — its $2.2B in revenue was up 7% over last year.

The firm’s leadership has suggested the layoffs aren't an effort to reduce overall payroll or meaningfully reduce its 13,000-person global workforce. Rather, they are the result of shifting priorities within the firm as it adjusts its business strategy to account for a data center landscape being radically transformed by an unprecedented wave of artificial intelligence-driven demand. 

“Equinix continues to evolve our services to ensure we provide the highest value to support the changing needs of our customers,” the company wrote in a statement to Light Reading. “As part of these ongoing efforts, we will at times make internal adjustments to reallocate resources and prioritize initiatives that accelerate our strategy. To that end, we recently eliminated a limited number of roles …  to align with current priorities.”

The shift in Equinix’s market strategy has emerged after the appointment of Adaire Fox-Martin as its new CEO in March. 

Until recently, the company hadn't been a major player in providing large-scale, single-tenant data centers for the world’s largest tech companies, the hyperscale market that is driving the bulk of the industry’s growth. Instead, the vast majority of its revenue had come from its retail colocation and interconnection business lines — selling capacity in multi-tenant buildings in the heart of major population centers. Under prior leadership, Equinix had intentionally steered clear of the hyperscale market in the U.S. 

But that has changed since Fox-Martin took the helm. The company has shifted significant resources toward expanding its portfolio of single-tenant hyperscale data centers, a business line the company brands as xScale.

Equinix opened its first North American xScale project earlier this year and is rapidly expanding its hyperscale pipeline. Last month, Equinix launched a $15B joint venture that is set to more than triple its U.S. xScale footprint. While xScale now accounts for only around 1% of Equinix’s total revenues, the firm’s leadership hopes to increase that share to 6% in the coming years. 

At the same time, the firm has started eliminating underperforming business lines. Equinix revealed last month that it is discontinuing Equinix Metal, the firm’s “bare metal offering” that allowed customers to pay for on-demand remote use of physical servers housed in Equinix data centers. 

Prior to this round of layoffs, Equinix saw a wave of turnover at the executive level in recent months. Chief Information Officer Milind Wagle left the company in September, while Chief Information Security Officer Michael Montoya departed earlier this month. Scott Crenshaw, Equinix’s executive vice president and general manager for digital services, also left the company in September.