GitLab has announced a sweeping organisational overhaul that will include workforce reductions, management restructuring and deeper integration of artificial intelligence across internal operations, as the software company positions itself for a rapidly evolving AI-driven development landscape.
The company confirmed on Monday that it plans to cut an unspecified number of jobs by June 1 while flattening parts of its organisational hierarchy by removing up to three layers of management in some functions.
According to reporting by Business Insider, the restructuring announcement triggered a sharp investor reaction, with GitLab shares falling 7% in after-hours trading following the disclosure.
In a memo addressed to employees, customers and investors, GitLab CEO Bill Staples described the changes as necessary to prepare the company for what he called the “agentic era”, where AI systems increasingly automate software creation, deployment and operational workflows.
“Software will be built by machines, directed by people,” Staples wrote in the letter.
Company restructures around AI-first operations
GitLab said the restructuring process would be conducted “openly”, including a voluntary separation window for employees.
Staples acknowledged that the approach would create uncertainty for staff over the coming weeks but argued that transparency would lead to a better long-term outcome.
The company employed 2,580 people as of January.
GitLab said it aims to finalise the new organisational structure on or before June 1, although timing may vary depending on local employment regulations.
The restructuring programme includes four major operational shifts:
- Reducing the number of countries where GitLab maintains smaller teams by up to 30%
- Removing up to three layers of management in selected functions
- Reorganising research and development into around 60 smaller teams
- Embedding AI agents into internal workflows to automate approvals, reviews and handoffs
Staples said the company had “grown into a shape that was right for the last era and isn’t right for this one”.
Smaller teams, flatter hierarchy
One of the most significant changes involves GitLab’s engineering and research structure.
The company plans to reorganise its R&D division into roughly 60 “smaller, more empowered teams with end-to-end ownership”, nearly doubling the number of independent operating teams.
The shift reflects a broader trend across the technology industry, where companies are moving away from large hierarchical structures in favour of leaner, autonomous product teams that can move faster and adapt more quickly to AI-driven workflows.
GitLab also plans to simplify management structures so that decision-makers operate closer to frontline engineering work.
Staples said flattening the organisation would allow leaders to become “closer to the work”, signalling a push towards faster execution and reduced operational complexity.
AI agents move deeper into enterprise workflows
A central part of GitLab’s strategy involves integrating AI agents into day-to-day operational systems.
According to the CEO memo, GitLab plans to automate reviews, approvals and workflow transitions internally using AI-powered systems.
The company said it would “right-size” roles across the organisation as those automation systems expand.
The move places GitLab among a growing number of enterprise software firms reshaping internal structures around AI-enabled productivity tools.
Staples argued that AI agents would increasingly manage software development tasks traditionally handled by human teams, including coding, deployment and system maintenance.
“Agents will plan, code, review, deploy, and repair,” he wrote.
At the same time, Staples stressed that human engineers would remain critical for high-level problem-solving, architecture decisions and managing complexity.
He said demand for advanced engineering expertise would continue to rise as software systems become more sophisticated.
“The supply of deep technical problems is multiplying, and the engineers who can solve them will be among the scarcest and most valuable talent in the market,” Staples wrote.
Betting on machine-scale software infrastructure
Beyond workforce restructuring, GitLab outlined an aggressive long-term technology strategy centred on AI-native software infrastructure.
The company said existing developer tools and platforms were not designed to operate at “machine scale”, where autonomous AI agents generate and process software continuously.
GitLab plans to rebuild parts of its infrastructure to support significantly higher levels of automated activity, including:
- AI-driven code generation
- Parallel merge requests
- Continuous automated deployments
- Agent-based orchestration systems
- API-first platform architecture
Staples said Git itself was being reengineered for machine-scale workloads and that GitLab was investing heavily in orchestration systems capable of coordinating AI agents across the software lifecycle.
The company also highlighted governance and compliance as strategic priorities, arguing that enterprises would need tighter controls as AI systems gain broader operational responsibilities.
Market pressure intensifies in AI software race
GitLab’s restructuring comes amid mounting competition across the AI-powered software development market, where companies are racing to integrate generative AI into coding, testing and deployment platforms.
The company’s strategy centres on what Staples described as “agentic engineering”, where AI systems function as active participants in software development rather than passive assistance tools.
GitLab also said it expects software demand to expand significantly as AI lowers the cost and complexity of development.
Staples claimed the developer platform market, historically priced in “tens of dollars per user per month”, is now moving into “hundreds” and potentially “thousands” of dollars per user annually as AI adoption accelerates.
The company reaffirmed its Q1 and full-year FY27 guidance and said the final financial impact of the restructuring would be disclosed during its June 2 earnings call once board approval is completed.
GitLab plans to unveil additional product and innovation updates during its GitLab Transcend event on June 10.
The restructuring marks one of the clearest signals yet that software companies are not only building AI tools for customers but are also redesigning their own organisations around automation, leaner structures and AI-native operating models.