SAN FRANCISCO, May 12, 2026, 12:02 PDT
GitLab Inc. plans to trim staff and overhaul its worldwide business in a bid to redirect spending toward artificial-intelligence agents. Shares slid roughly 9.6% to $23.18 on the Nasdaq Tuesday afternoon after the announcement. The company left the exact number of job cuts undisclosed.
Timing is key here: GitLab wants to prove to investors that AI agents—tools designed to handle tasks like planning, coding, and code review with less hands-on input—can drive meaningful business growth, not just sit as another product feature. CEO Bill Staples made clear the layoffs weren’t about optimizing for AI or just slashing costs, saying GitLab intends to funnel most of the savings right back into growing the company.
GitLab shares are feeling heat. Raymond James cut its rating to “Market Perform” from “Outperform” on Tuesday, flagging execution risk tied to the company’s platform re-architecture and internal overhaul. The firm also pointed to softer growth trends. Investing.com
In a May 11 8-K, GitLab described the workforce reduction as part of an effort to align its operations with its strategic focus. The company stuck by its outlook for both the first quarter and the full fiscal year 2027. More detail on the size and cost of the restructuring will come during its June 2 earnings call.
GitLab is set to cut its footprint in countries where it has only small teams by as much as 30%, according to Staples, who briefed staff, clients and shareholders. The company will also eliminate up to three layers of management in certain areas and break up its research and development group into about 60 smaller teams. Plans include deploying AI agents to handle internal reviews, approvals and task handoffs.
Staples said planning is out in the open, with a voluntary separation window part of the process. He acknowledged it “creates real uncertainty” for employees. GitLab expects to settle on the company’s new structure by June 1, depending on local regulations. Business Insider
As of Jan. 31, GitLab counted roughly 2,580 employees working across 60 countries, according to its annual report. The company operates entirely remotely and does not have a headquarters—something it’s emphasized as a core part of its model for years.
Competition is intense. In its latest annual report, GitLab singled out Microsoft Corp.—which owns GitHub—as its main rival. Atlassian, JFrog, and Harness also made the list of competitors in the DevOps space, where software helps teams build, test, secure, and deploy code.
GitLab’s been pushing to shed its image as just a code-management tool. Back in March, the company reported fiscal 2026 revenue up 26% at $955.2 million and said annual recurring revenue topped $1 billion for the first time. CFO Jessica Ross pointed to the Duo Agent Platform and hybrid pricing as “new multi-year growth drivers” in the pipeline. GitLab Investor Relations
Staples doesn’t mince words: “Software will be built by machines, directed by people,” he said in his May 11 letter. According to him, agents will handle the planning, coding, review, deployment, and fixing of software. People, though, will still make the calls on architecture, customer issues, and tradeoffs. SEC
GitLab faces the tricky task of slashing costs and reorganizing all in one go. Analysts at Raymond James flagged the move, cautioning it might unsettle day-to-day business and push key employees out the door. The company echoed some of that caution in its own filing, highlighting the usual risks tied to its restructuring and financial outlook.
Right now, investors are left guessing. GitLab hasn’t budged on its guidance, but the company hasn’t spelled out how deep the layoffs go, what the restructuring will cost, or how soon AI might move the revenue needle. Those details aren’t coming until after the bell on June 2, when GitLab is set to report.
