GitLab has announced a major organizational overhaul that will bring workforce reductions, management restructuring and deeper use of artificial intelligence across its operations as the company adapts to what it describes as a rapidly changing AI-driven software industry.
The company confirmed on Monday that it plans to reduce an unspecified number of jobs by June 1 while also flattening parts of its organizational structure. The changes include removing as many as three layers of management in certain functions as GitLab looks to speed up decision-making and streamline operations.
According to a report by Business Insider, the announcement sparked concern among investors, with GitLab shares falling around 7% in after-hours trading after the news became public. Reports later indicated the stock decline widened to more than 8% in after-market trading.
In a memo shared with employees, customers and investors, GitLab CEO Bill Staples said the changes are aimed at preparing the company for what he called the “agentic era,” where AI systems take on a larger role in software development, deployment and workflow management.
“Software will be built by machines, directed by people,” Staples wrote in the letter.
GitLab said the restructuring process would be handled “openly,” including offering a voluntary separation program for employees. Staples acknowledged the uncertainty the move could create for staff but said transparency was important for the company’s long-term future.
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The company had 2,580 employees as of January and expects the new organizational structure to be finalized on or before June 1, although timelines could vary depending on local labor laws and regulations.
As part of the restructuring, GitLab plans to reduce the number of countries where it maintains smaller teams by up to 30%, remove management layers in selected divisions and reorganize its research and development operations into nearly 60 smaller teams. The company also plans to expand the use of AI agents internally to automate reviews, approvals and operational handoffs.
Staples said GitLab had “grown into a shape that was right for the last era and isn’t right for this one.”
The company’s R&D division will be reorganized into what GitLab described as “smaller, more empowered teams with end-to-end ownership.” The restructuring is expected to nearly double the number of independent operating teams within the company.
The shift reflects a wider trend in the technology industry, where companies are increasingly moving away from large hierarchical structures in favor of leaner teams designed to move faster and integrate AI tools more deeply into everyday operations.
Despite the cuts, Staples insisted the move was not purely about reducing costs or replacing workers with AI.
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“The cuts are not an AI optimization or cost cutting exercise,” Staples said in the memo.
“We intend to reinvest the vast majority of savings back into the business to accelerate our unique opportunity in the agentic era,” he added, referring to the growing market for AI agents that can complete business tasks.
Staples also said the company is “rewiring internal processes with AI agents, automating the reviews, approvals and handoffs to speed us up.”
The CEO noted that the company has not yet determined exactly how many roles will be affected. GitLab expects to share more details about the restructuring and its impact during its quarterly earnings report on June 2.
“We must revisit the size of staffing for each role to ensure we are optimizing for speed and customer outcomes,” Staples wrote. “In some cases AI can augment and accelerate what team members have been doing, in other places we need to expand certain roles to go faster.”