GitLab on June 3 laid off roughly 14% of its workforce — approximately 350 employees — as part of a restructuring the company first outlined in May. Alongside the headcount reduction, GitLab is pulling out of 22 countries and flattening management layers while redirecting investment into its core platform. CEO Bill Staples said on a Tuesday earnings call that agentic AI workloads are pushing developer infrastructure beyond what it was originally designed to handle, and that the company has begun what he described as a “generational rebuild of git” to support 100x growth in agent-driven traffic. GitLab also disclosed it has partnered with an unspecified AI lab to redesign its backend, with plans to ship APIs optimized for agents to store and retrieve code context, new orchestration tools for coordinating work between AI agents and developers, and governance capabilities baked directly into the platform.
The restructuring comes alongside a strong quarterly result: GitLab reported Q1 FY2027 revenue of $264 million, up 23% year-over-year, with gross margins of 88%, and expects to incur $30–$35 million in one-time restructuring charges. The infrastructure strain is not unique to GitLab — rival GitHub has also faced uptime issues from a surge of AI-generated code submissions. The layoffs add to an accelerating wave across the industry; per Statista, the tech sector has already shed over 100,000 jobs this year, with Intuit, Amazon, Cisco, Cloudflare, Meta, and Microsoft among those cutting headcount while simultaneously posting record revenues and citing AI as the primary rationale.