GitLab shuts offices, cuts 100s of workers

05 Jun 2026, 13:17 · The Fresno Bee

Tech companies are no longer just cutting jobs. Many are reshaping themselves for the age of artificial intelligence.

GitLab, one of the most popular web-based software platforms used by software engineers as a code repository, security, and code deployment, has now joined the growing list of companies becoming AI-first.

As part of the restructuring process, which includes cost reallocation, they are laying off hundreds of employees and exiting several countries.

The software company previously warned that it was entering what it called "Act 2," a restructuring plan designed to prepare the business for the agentic AI era.

At the time, GitLab made clear that changes were coming, but had not yet disclosed the full impact on workers, covered by TheStreet.

GitLab cuts 350 jobs in restructuring plan

GitLab Chief Financial Officer Jessica Ross revealed the exact number of people affected in the restructuring.

At the company's first-quarter fiscal 2027 earnings remarks, GitLab said approximately 14% of its workforce, or about 350 team members, will be affected.

The company also expects to exit 22 countries and reduce its team member geographic footprint by about 37% as part of the restructuring.

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For workers, GitLab's AI-focused business overhaul is no longer just a strategic plan. It is resulting in hundreds of job cuts and a smaller global footprint.

"We are finalizing these decisions and anticipate that approximately 14%, or 350 of our team members as of January 31, 2026, will be impacted," said Jessica Ross.

The company also plans to flatten its organizational structure, removing up to three layers of management.

GitLab expects to incur $30 million to $35 million in pre-tax restructuring charges.

About $19 million of that will be recorded in the second quarter, with most of the remaining charges recognized over the following three quarters.

The company said it expects to reinvest the vast majority of the savings from the restructuring into initiatives tied to Act 2.

Those include investments in team members, shifting resources toward new architectural bets, and building out internal AI tooling.

GitLab's stock is down 17% year to date.

Cheng Xin / Getty Images

GitLab says AI is changing its business

GitLab sells a DevSecOps platform used by software-development teams. The company is now betting that AI agents will change how those teams write, test, secure, and ship code.

Chief Executive Bill Staples said GitLab's core enterprise DevSecOps business remains strong, but the company is moving quickly to capture demand for AI-powered software development.

"The agentic era is creating structural tailwinds for DevSecOps platforms, and GitLab is on the critical path to scaling agentic engineering in the enterprise," Staples said.

GitLab reported first-quarter revenue of $264 million, up 23% from a year earlier. The company also reported $38 million in non-GAAP operating profit and said it had 1,519 customers paying more than $100,000 a year, up 18% year over year.

The company is leaning heavily into its Duo Agent Platform, which reached general availability shortly before the quarter began.

GitLab plans to consolidate its AI portfolio into a single agentic platform by 2027 and adopt a consumption-based business model.

The company bets that AI-generated code will create more demand for platforms that manage the work around coding, including testing, security, compliance, governance, and deployment.

Analysts are bullish but also consider layoff pressure

Wall Street analysts were generally more encouraged by GitLab's quarter, but they were not ready to call the company's AI shift a clean win yet.

RBC Capital raised its price target on GitLab to $29 from $25 while keeping a Sector Perform rating.

The firm pointed to GitLab's stronger revenue beat and positives around new customer growth and the Duo Agent Platform.

Still, it said weaker indicators, such as remaining performance obligation trends, continued small-business pressure, and M&A-related contraction, kept the story more balanced.

DA Davidson also lifted its price target to $35 from $24, while maintaining a Neutral rating.

The firm said GitLab's quarter was better than usual and that early adoption of the Duo Agent Platform helped support SaaS performance.

It also noted that the company is operating in a difficult macro environment, with customer headcount cuts and price-sensitive buyers still weighing on demand.

Bank of America raised its price target to $32 from $27 and kept a Neutral rating.

The firm called GitLab's fiscal first-quarter results good, but said the company still needs to show that growth can reaccelerate.

BofA noted that second-quarter guidance implies a slowdown from first-quarter revenue growth, while the back half of the year points to further deceleration.

BTIG took a more optimistic view, raising its price target to $36 from $30 and keeping a Buy rating.

The firm said GitLab's gross bookings growth was the strongest in four quarters and that early progress on the Duo Agent Platform, along with new monetization tools expected at GitLab's Transcend event, made it more constructive on the company's agentic AI opportunity.

Morgan Stanley analyst Sanjit Singh raised the price target to $30 from $29 and kept an Equal Weight rating, saying GitLab executed well despite a tough backdrop.

But the analyst also noted that GitLab raised its fiscal 2027 guidance by less than the size of the first-quarter beat, suggesting management is still cautious about tech layoffs, seat contraction, and the risks tied to the Act 2 restructuring. Source: TheFly.

Together, the analyst's reactions show why GitLab's restructuring is complicated. The company is showing early signs that its AI strategy can create new demand, but that growth is coming as GitLab is cutting workers, shrinking its global footprint, and facing layoffs within its own customer base.

GitLab warns of more tech layoffs

GitLab's job cuts are happening amid pressure from layoffs at other companies.

Ross said GitLab saw more seat contraction than expected during the quarter, mostly tied to layoffs in its customer base. That matters because GitLab sells software-development tools to companies, and customer layoffs can reduce the number of seats those companies need.

The company also cited mergers and acquisitions as an additional headwind.

GitLab said its price-sensitive customer cohort, which represents roughly 20% of annual recurring revenue, remains under pressure. Larger enterprise customers, however, remained resilient.

Ross also said the company sees "accelerating layoffs concentrated in the tech sector" and heightened customer caution connected to those changes.

That makes GitLab's restructuring part of a broader trend in the technology labor market.

Companies across different industries have been trying to reduce costs, flatten organizations, and redirect investment toward AI.

The company is cutting jobs while also telling investors that AI is expanding its long-term opportunity. It is also using the restructuring to redirect money toward the same AI strategy driving the reorganization.

GitLab raises guidance despite job cuts

GitLab still raised its full-year outlook despite the restructuring.

The company now expects fiscal 2027 revenue of $1.112 billion to $1.118 billion, representing about 16% to 17% growth from the previous year.

For the second quarter, GitLab expects revenue of $272 million to $274 million, representing about 15% to 16% year-over-year growth.

Still, GitLab warned that changes of this scale could create near-term disruption.

Ross said the company carefully considered business continuity when reviewing restructuring decisions affecting its quota-carrying sales force. She also said GitLab used a voluntary separation program to reduce future attrition tied to the changes.

"Changes of this scale carry some near-term disruption, and our guidance reflects that," Ross said.

Staples also acknowledged the workers leaving the company as part of the Act 2 restructuring.

"The work you've done here mattered, and it continues to matter," Staples said. "You came to GitLab when we needed you. You laid the foundation on which we stand today."

For GitLab, the argument is that AI is ushering in a new era of software development, and that the company must reorganize now to capture it.

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This story was originally published June 5, 2026 at 6:17 AM.