Software development firm GitLab said it expects around 14% of its global workforce will be impacted as part of its restructuring plan. The company expects to exit 22 countries to reduce its team member geographic footprint by about 37% according to a filing on Tuesday.
The company also mentioned it would incur nearly $30 million to $35 million in pre-tax restructuring charges. These charges would consist mostly of one-time severance, employee termination benefit costs, and retention costs associated with the execution of the restructuring.
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GitLab had already mentioned the cuts earlier but it did reveal the exact numbers. According to previous reports, 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. This announcement sparked concern among investors, with GitLab shares falling around 7% in after-hours trading after the news became public.
“The plan is intended to help position the company for long-term success by realigning its operating structure to optimize execution against its strategic priorities,” Github said. The company expects the restructuring to be over by the end of fiscal 2027.
This comes shortly after GitLab reported its financial result of the fiscal year quarter ending on April 30. “The agentic era is creating structural tailwinds for GitLab, and Q1 showed it clearly with accelerating platform activity and promising traction from GitLab Duo Agent Platform,” said Bill Staples, GitLab chief executive officer.
“GitLab is the only platform that spans the full software lifecycle with one control plane, one data model, and cloud and AI model neutrality. As our largest customers come to us with new needs around security, governance, and orchestration at machine scale, we are evolving GitLab to be the trusted enterprise platform for software creation in the AI era,” he added.
While Staples did not directly address the cuts, the focus on AI is notable since the technology is frequently cited as the reason behind tech layoffs.
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According to Techzine, the company’s management said the majority of savings will be reinvested in R&D and AI products.
A number of other companies have conducted layoffs recently. Meta recently conducted a round of layoffs which had a major impact on the Seattle region, with 1,395 employees in King County losing their jobs.
LinkedIn also announced it is laying off employees across multiple divisions and reducing spending on office space, marketing, and events as its parent company Microsoft accelerates a broader restructuring tied to artificial intelligence investments and operational efficiency.