Developer platform GitLab has laid off about 14% of its workforce, about 350 employees, as part of a broader restructuring effort it detailed last month.
The company said in May that it was going to reduce its workforce as it exited 22 countries, flattened management layers, and invested in infrastructure to scale its platform and serve increased traffic from AI workflows, with a sharper focus on research and development.
CEO Bill Staples said during a conference call on Tuesday that agentic workloads are stressing developer infrastructure more than it was designed to handle. It isn’t a problem unique to GitLab. The company’s rival GitHub has itself struggled to deal with a massive influx of AI-powered submissions that have affected its uptime.
“Agents work at machine scale, and they’re pushing competitors to the brink. This quarter we began a generational rebuild of git to support the scale and features required for 100x growth. This is a scale requirement that didn’t exist before and has become a real pain point for every team on their agentic journey,” Staples said.
Staples said the company has partnered with an unspecified AI lab to design and rebuild its infrastructure for AI workloads, as well as construct APIs “optimized for agents to store and retrieve context, including code.” It is also investing in orchestration tools for coordinating software development between AI agents and developers, building a context layer, and baking in governance tools directly into its platform.
GitLab joins a number of tech companies such as Intuit, Amazon, Block, Cisco, Cloudflare, Meta, Microsoft, and Oracle that have laid off large numbers of employees, citing a need to make AI a core part of their business. The tech industry has already cut more than 100,000 jobs this year, per Statista, and is on track to outpace both 2024 and 2025 if the layoff trend continues.
The pattern is by now familiar: Companies are reporting record revenues while simultaneously shrinking their workforces, with AI cited as both the reason for the growth and the justification for the cuts.
Indeed, all of these companies have recently reported strong revenue and profit, pointing to strong demand for AI products, services, or the infrastructure to power them, and GitLab is no exception.
On Tuesday, the company reported first-quarter revenue of $264 million, up 23% from a year earlier, and gross margins of 88%. It expects to incur $30 million to $35 million in restructuring expenses as part of the effort.
Source: TechCrunch
