GitLab has laid off approximately 350 employees, or 14% of its workforce, as part of a restructuring effort announced last month. The developer platform is exiting 22 countries, flattening management layers, and redirecting investment toward infrastructure designed to handle the surge in traffic from artificial intelligence workflows.
CEO Bill Staples said during a conference call on Tuesday that agentic workloads — software agents that operate autonomously — are stressing developer infrastructure beyond what it was originally built to handle. “Agents work at machine scale, and they’re pushing competitors to the brink,” Staples said. “This quarter we began a generational rebuild of git to support the scale and features required for 100x growth.”
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The problem is not unique to GitLab. Rival GitHub has also struggled with uptime issues caused by a massive influx of AI-powered submissions.
Rebuilding for agentic scale
Staples said GitLab has partnered with an unspecified AI lab to redesign its infrastructure for AI workloads and to construct APIs “optimized for agents to store and retrieve context, including code.” The company is also investing in orchestration tools that coordinate software development between AI agents and human developers, building a context layer, and embedding governance tools directly into the platform.
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GitLab expects to incur $30 million to $35 million in restructuring expenses as part of the effort.
Revenue growth amid workforce cuts
GitLab joins a growing list of tech companies — including Intuit, Amazon, Block, Cisco, Cloudflare, Meta, Microsoft, and Oracle — that have cited AI as both a driver of growth and a justification for reducing headcount. The pattern has become familiar: companies report record revenues while simultaneously shrinking their workforces.
On Tuesday, GitLab reported first-quarter revenue of $264 million, up 23% from a year earlier, with gross margins of 88%. The tech industry has already cut more than 100,000 jobs this year, according to Statista, and is on track to outpace both 2024 and 2025 if the layoff trend continues.
Staples framed the cuts as a necessary step to remain competitive. “This is a scale requirement that didn’t exist before and has become a real pain point for every team on their agentic journey,” he said.
