Jaque Silva/NurPhoto via Getty Images
- GitLab stock is down after hours following its plans to lay off staff as it looks to meet the “agentic era.”
- “The planning is happening openly, including a voluntary separation window,” GitLab’s CEO wrote in a memo.
- The CEO acknowledged the limbo period “creates real uncertainty for our team over the next few weeks.”
GitLab employees are the latest group to be sweating it out for a few weeks as they wait to learn whether they dodged the layoff blade.
The software company, which had 2,580 employees as of January, announced on Monday that it was restructuring to meet “the agentic era” and planned to cut an unspecified number of its workforce by June 1.
Shares in the company fell 7% after hours following the announcement.
GitLab CEO Bill Staples wrote in a memo to employees and investors that the restructuring would happen “openly” and entail flattening the org chart — removing “up to three layers of management so leaders are closer to the work.”
The company’s research and development teams will be reorganized into around 60 “smaller, more empowered teams with end-to-end ownership,” Staples wrote.
AI agents will also be embedded into GitLab’s internal processes, he wrote, “automating the reviews, approvals, and handoffs to speed us up,” and that means the company will “right-size” roles accordingly.
The CEO said that GitLab, which makes a software platform to help coders manage projects and tasks, is evolving its strategy “for the future state of software engineering.”
“As the cost of producing software collapses, demand for it will expand. Last year, the developer platform market used to be measured in tens of dollars per user per month, this year it is hundreds/user/month and headed to thousands,” Staples wrote.
Addressing the state of developer industry itself, GitLab’s CEO said that “the supply of deep technical problems is multiplying, and the engineers who can solve them will be among the scarcest and most valuable talent in the market.”
Read GitLab CEO Bill Staples’ memo to employees:
GitLab Act 2
A letter to our customers and our investors.
We’ve been working through some significant changes inside GitLab over the past few days, and I want to share them with you directly. The email I sent the team is included below for full context.
The agentic era affords GitLab the largest opportunity in our history as a company, and we’re making the structural and strategic decisions to meet it.
This letter has three parts. First, the operational and structural news, which is hard. Second, the strategic thesis we’re betting on. And finally, what this means specifically for you, our customers and investors.
The structural news
This morning we shared with team members that we’re beginning a restructuring process at GitLab, and we’re running it differently than most. The planning is happening openly, including a voluntary separation window. That creates real uncertainty for our team over the next few weeks, but we believe the outcome will be better for it. Where we can, we plan to finalize the new shape of the company on or before June 1. Where local requirements apply we will not make any changes until the local process is complete.
Four operational changes are part of the workforce reduction.
1. We’re reevaluating our operational footprint, and are planning to reduce the number of countries by up to 30% where we have small teams. We’ll continue serving customers in those markets through our partner network.
2. We’re planning to flatten the organization, removing up to three layers of management in some functions so leaders are closer to the work.
3. We’re re-organizing R&D to create roughly 60 smaller, more empowered teams with end-to-end ownership, nearly doubling the number of independent teams.
4. We’re rewiring internal processes with AI agents, automating the reviews, approvals, and handoffs to speed us up, and plan to right-size roles across the company to follow suit.
Operational changes and the update to our strategy are happening together: they are related but independent. Operationally, we grew into a shape that was right for the last era and isn’t right for this one. The strategy below is what we’re betting on next, and stands on its own.
We are reaffirming our Q1 and full year FY27 guidance today. The final scope and financial impact of the restructuring will be shared on our June 2 earnings call, once we’ve finished the plan and received approval by our board.
Our Core Beliefs
Underpinning the changes we’re making today, and our go forward strategy are 10 core beliefs that span the world we’re building for, the architectural bets we’re making and how we’ll deliver.
The world we’re building for
We’re evolving our strategy to optimize for the future state of software engineering:
1- Software will be built by machines, directed by people. AI is the substrate on which future software gets built. Agents will plan, code, review, deploy, and repair. Humans still own the judgment that matters most: architecture, deep understanding of the customer problem, the tradeoffs that require taste. This is why we built and released the Duo Agent Platform in January. Our first quarter adoption is promising, and we’re ready to accelerate.
2- The agentic era multiplies demand for software. Software has been the force multiplier behind nearly every business transformation of the last two decades. The constraint was the cost and time of producing and managing it. That constraint is collapsing. As the cost of producing software collapses, demand for it will expand. Last year, the developer platform market used to be measured in tens of dollars per user per month, this year it is hundreds/user/month and headed to thousands. Not only is the value of software for builders increasing, but we believe there will be more software and builders than ever, and we will serve an increasing volume of both.
3- The consequential work belongs to engineers. Engineering has always been about more than writing code. Great engineers are problem solvers and builders who care about system design, distributed systems, reasoning through failures, safely integrating new capability into critical systems, and making decisions under ambiguity. These are exactly the skills the agentic era needs more of, especially as the volume of software increases. The supply of deep technical problems is multiplying, and the engineers who can solve them will be among the scarcest and most valuable talent in the market. Our core users’ roles are evolving, their importance is only increasing.
The architectural bets we’re making
Platforms that weren’t built for machine scale are starting to break under it. Winning means investing in the fundamentals that really matter: security, performance, scalability, reliability and user experience. We’re making five, fundamental architectural bets. Each one is underway and we plan to deliver without disruption to GitLab customers that depend on us every day.
4- Machine-scale infrastructure. Agents open merge requests in parallel, trigger pipelines around the clock, and push commits at a rate no human team ever did. Git itself wasn’t designed for that load, and bolting AI onto platforms not built for agents is the biggest mistake of this era. We’re doing a generational rebuild of the underlying infrastructure to handle agent-rate work as the default. Git itself is being reengineered for machine scale. The monolith is giving way to modern, API-first, composable services. And agent-specific APIs are being built so agents can act as first-class users of the platform, not as bolted-on consumers of human-shaped interfaces. The value of this 100x scale infrastructure, and the reliability and performance it provides is much higher than the generation of infrastructure in the market today.
5- Orchestration across the full lifecycle. A single agent that writes code or opens a merge request produces activity. Enterprises don’t need agent activity.
They need running software that moves the business forward. Orchestration is the layer that gets you there. It coordinates agents across the lifecycle, assigning work, managing state, passing context, resolving conflicts, enforcing policy, and keeping a human in the loop when it matters. CI/CD is one of the components getting reimagined. The GitLab pipeline was designed to take human-rate commits and ship them safely; in the agentic era our orchestration service becomes the runtime that coordinates agents, validates the work and enforces guardrails, and drives change all the way to production at machine rate.
6- Context is our superpower. Every dev tool vendor is converging on similar code generation capabilities. Enterprise AI bills are climbing as fast as adoption. What doesn’t commoditize is the unique context the model gets to work with: a data model that connects planning, code, review, security, deployment, and operations across every project and repository, accumulated over years of a team’s work. We’re investing in that connected data model as a first-class, API-accessible service, and it delivers more value with every human and agent action. Context is what lets agents spend fewer tokens and deliver better results.
7- Governance built into the core. Governance is what lets enterprises move fast in the agentic era. Like a race car, it doesn’t matter how fast you can go if you can’t maintain control. As agents take on more of the work, enterprises need a platform that can enforce who’s allowed to do what, prove what happened and why, and keep sensitive code and data where it belongs. We’re building identity, audit, policy, and deployment flexibility as core platform services that every agent, pipeline, and merge request runs through by default, rather than a separate product layered on top.
8- One platform, three modes. Trillions of lines of code run the world’s businesses today. Rewriting most of it is too risky and too expensive to justify. The cloud era taught us enterprises run hybrid, and operating across that mix has been painful, expensive, and never fully solved. The agentic era will be the same.
Every enterprise will live across a spectrum of human-owned, agent-assisted, and agent-autonomous work. We’re building one platform, one data model, one governance system that operates across all three modes, and delivering it cloud and model neutral.
How we’ll deliver it
9- A flexible business model. As the way software gets built changes, the business model must evolve with it. Agentic AI can augment teams, perform real work and the business model must scale with the cost and value of the work performed. We’re keeping what works: the predictability of subscriptions for what customers have today. We’ve already added consumption pricing for the work agents do, with other major players following over the past few months. Next, we’re introducing more flexibility to mix both as the way of work evolves.
10- Culture of excellence. Operational character is a key differentiator. What matters most right now is the ability to move quickly, own outcomes, and deliver real value to our customers. Speed with Quality, Ownership Mindset, and Customer Outcomes are our new operating principles, built on a culture of excellence.
To our customers
For our customers, the most important thing today is what doesn’t change. The support, roadmap commitments, contractual terms — all of it continues without disruption. Your account team is available to walk you through today’s news if you’d like a conversation.
Where you should expect to see us evolve is in the quality, depth and pace of innovation we ship. We will lead the way in agentic engineering by being customer zero of our platform, demonstrating with our innovation and our results the success you can bet on as our customers. Our vision for the product and business model is clearer than it has ever been and we’re accelerating the work. We’ll share the next wave of our innovation roadmap at GitLab Transcend on June 10, 2026 and hope you’ll join us.
To our investors
Today’s announcement is a deliberate move to lead in a market we believe is in the middle of its largest shift in twenty years. The opportunity here isn’t incremental growth on a DevSecOps platform — we’re building toward becoming the trusted enterprise platform for software creation in the AI era.
We look forward to sharing an update on the business and our Q1 results in our upcoming earnings call on June 2, 2026. We’ll also share the final scope and financial impact of the restructuring at that time, although we anticipate reinvesting the majority of savings into accelerating our progress against the specific growth and technological initiatives that we’ve outlined.
This is the most consequential work we’ve taken on as a company. We’ll prove it in the innovation we bring to market, how we serve our customers, and how we create value for our shareholders over the near- and long-term.
Thank you,
-Bill Staples CEO, GitLab
Â
