GitLab cuts 14% of workers because it scales its platform to serve AI workloads

Developer platform GitLab has laid off about 14% of its workforce, about 350 workers, as a part of a broader restructuring effort it detailed final month.

The corporate mentioned in Could that it was going to cut back its workforce because it exited 22 nations, flattened administration layers, and invested in infrastructure to scale its platform and serve elevated site visitors from AI workflows, with a sharper give attention to analysis and improvement.

CEO Invoice Staples mentioned throughout a conference call on Tuesday that agentic workloads are stressing developer infrastructure greater than it was designed to deal with. It isn’t an issue distinctive to GitLab. The corporate’s rival GitHub has itself struggled to take care of a large inflow of AI-powered submissions which have affected its uptime.

“Brokers work at machine scale, and so they’re pushing opponents to the brink. This quarter we started a generational rebuild of git to help the dimensions and options required for 100x development. It is a scale requirement that didn’t exist earlier than and has turn out to be an actual ache level for each staff on their agentic journey,” Staples mentioned.

Staples mentioned the corporate has partnered with an unspecified AI lab to design and rebuild its infrastructure for AI workloads, in addition to assemble APIs “optimized for brokers to retailer and retrieve context, together with code.” Additionally it is investing in orchestration instruments for coordinating software program improvement between AI brokers and builders, constructing a context layer, and baking in governance instruments instantly into its platform.

GitLab joins numerous tech corporations similar to Intuit, Amazon, Block, Cisco, Cloudflare, Meta, Microsoft, and Oracle which have laid off massive numbers of workers, citing a have to make AI a core a part of their enterprise. The tech trade has already lower greater than 100,000 jobs this yr, per Statista, and is on observe to outpace each 2024 and 2025 if the layoff development continues.

The sample is by now acquainted: Firms are reporting document revenues whereas concurrently shrinking their workforces, with AI cited as each the explanation for the expansion and the justification for the cuts.

Certainly, all of those corporations have lately reported sturdy income and revenue, pointing to sturdy demand for AI merchandise, providers, or the infrastructure to energy them, and GitLab is not any exception.

On Tuesday, the corporate reported first-quarter income of $264 million, up 23% from a yr earlier, and gross margins of 88%. It expects to incur $30 million to $35 million in restructuring bills as a part of the trouble.