The tech sector’s relentless restructuring wave has claimed another major player, pushing 2026’s total workforce reductions to a grim milestone, as companies continue to reallocate capital towards automated systems.
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GitLab, an open-source web platform crucial to engineers for securely storing code, tracking bugs, running tests, and more, is widely used by engineers, data analysts, and coders alike.
Recently, it announced an organizational overhaul towards an AI ecosystem.
GitLab CEO Bill Staples announced GitLab Act 2, a restructuring featuring aggressive operational consolidation, flattening of corporate management layers, and a shift away from a human-centric approach towards an ecosystem built around autonomous AI agents.
The announcement comes as the tech industry faces an intense secondary wave of job cuts. According to tracking data from Layoffs.fyi, 108,724 tech employees have been laid off across 137 companies in 2026 alone, with enterprise software and AI transitions driving the vast majority of this change.
To position itself for what GitLab management calls the agentic era, the company is executing structural changes that will completely rewrite its operations.
In a memo sent to its employees, CEO Bill Staples noted, “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.”
More Layoffs:
The financial impact, including the exact number of people to be laid off in restructuring, will be shared by GitLab during its Q1 earnings call scheduled on June 2.
Agents will plan, code, review, deploy, and repair.
Staples clarified that humans will still be behind the machine in terms of architecture and a deep understanding of customer problems.
“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,” said Staples in the memo.
Before the company announces a final headcount on June 2, it has given its employees until May 18 to apply for a voluntary separation. Those leaving voluntarily, if approved, will also get a similar severance package as anyone else.
The structural cuts come at a complex time for GitLab’s workforce, underscoring the difference between corporate staffing and capital allocation.
In the company’s Q4 and full-year 2026 financial report, it reported a 23% increase in total revenue and a non-GAAP adjusted free cash flow of $219.6 million.
Alongside Act 2 restructuring, GitLab’s board also authorized a $400 million share repurchase for its Class A common stock following its Q4 2026 earnings report.
“Our new $400 million share repurchase authorization reflects confidence in the business and our commitment to delivering shareholder value,” said Staples in the earnings release.
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In the memo, Staples clarified that AI or cost-cutting is not the reason behind the restructuring.
“We intend to reinvest the vast majority of savings back into the business to accelerate our unique opportunity in the agentic era as defined in ur Act 2 Core beliefs,” said Bill Staples, CEO, GitLab.
This mirrors a shift playing out across other modern corporate tech companies.
Just recently, Cisco’s CEO echoed a similar sentiment about the 4,000 job cuts announced during the company’s earnings call. Chuck Robbins, in an interview with CNBC, said that the reduction was not due to “cost reduction” but rather a “cost reallocation” to fund its AI buildout.
Earlier this month, Cloudflare’s CEO Matthew Prince announced a 20% workforce reduction, around 1,100 employees, noting, “This isn’t a cost-cutting exercise or an assessment of an individual’s performance.”
Cloudflare reported a 34% year-over-year revenue increase, noting that the restructuring is about creating “value in the agentic AI era.”
Much like his peers at Cisco and Cloudflare, Staples also emphasized the overhaul, “Of course, AI is changing the way we work and is part of our transformation plan, but this is not an AI optimization or cost-cutting exercise.“
Despite the buyback cushion and top-line growth, analysts are skeptical of GitLab’s long-term operating backdrop.
Cantor Fitzgerald, ahead of GitLab’s earnings call on June 2, lowered its price target to $27 from $30, maintaining a Neutral rating. The firm notes that while AI-driven usage growth across continuous integration and continuous delivery is improving the platform’s engagement, durability concerns loom large.
The firm further added that investors remain wary of the company’s ability to successfully execute its transition to agile software development. Added pressure includes the dollar-based net retention rate, securing new customer logos in a thoroughly saturated DevSecOps market, and the broader tech layoffs, according to TheFly.
As evident in the company’s current stock performance, GitLab is down over 50% year over year, losing half of its gains.
Exactly one year ago today, on May 15, 2025, GitLab’s stock closed at $53.82, a 52-week high for the tech company. While on Friday this year, it closed at $23.66.
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This story was originally published May 16, 2026 at 8:33 AM.