GitLab cuts 14% of staff as it scales its platform to serve AI workloads

Developer level GitLab has laid disconnected astir 14% of its workforce, astir 350 employees, arsenic portion of a broader restructuring effort it detailed past month.

The institution said successful May that it was going to trim its workforce arsenic it exited 22 countries, flattened absorption layers, and invested successful infrastructure to standard its level and service accrued postulation from AI workflows, with a sharper absorption connected probe and development.

CEO Bill Staples said during a conference call connected Tuesday that agentic workloads are stressing developer infrastructure much than it was designed to handle. It isn’t a occupation unsocial to GitLab. The company’s rival GitHub has itself struggled to woody with a monolithic influx of AI-powered submissions that person affected its uptime.

“Agents enactment astatine instrumentality scale, and they’re pushing competitors to the brink. This 4th we began a generational rebuild of git to enactment the standard and features required for 100x growth. This is simply a standard request that didn’t beryllium earlier and has go a existent symptom constituent for each squad connected their agentic journey,” Staples said.

Staples said the institution has partnered with an unspecified AI laboratory to plan and rebuild its infrastructure for AI workloads, arsenic good arsenic conception APIs “optimized for agents to store and retrieve context, including code.” It is besides investing successful orchestration tools for coordinating bundle improvement betwixt AI agents and developers, gathering a discourse layer, and baking successful governance tools straight into its platform.

GitLab joins a fig of tech companies specified arsenic Intuit, Amazon, Block, Cisco, Cloudflare, Meta, Microsoft, and Oracle that person laid disconnected ample numbers of employees, citing a request to marque AI a halfway portion of their business. The tech manufacture has already chopped much than 100,000 jobs this year, per Statista, and is connected way to outpace some 2024 and 2025 if the layoff inclination continues.

The signifier is by present familiar: companies are reporting grounds revenues portion simultaneously shrinking their workforces, with AI cited arsenic some the crushed for the maturation and the justification for the cuts.

Indeed, each of these companies person precocious reported beardown gross and profit, pointing to beardown request for AI products, services, oregon the infrastructure to powerfulness them, and GitLab is nary exception.

On Tuesday, the institution reported first-quarter gross of $264 million, up 23% from a twelvemonth earlier, and gross margins of 88%. It expects to incur $30 cardinal to $35 cardinal successful restructuring expenses arsenic portion of the effort.