GitLab Inc. (NASDAQ:GTLB) said in an 8-K filing that it will implement a major restructuring and workforce reduction as part of a program the company has named "GitLab Act 2." The company framed the initiative as preparation for what it called the "agentic era" of AI-driven engineering. Following the disclosure, GitLab shares fell 8.2% in after-hours trading on Monday.
Management reiterated guidance for the first quarter and full fiscal year 2027 that was initially provided on March 3. The company continues to expect quarterly revenue in a range of $253 million to $255 million, a figure that aligns closely with the analyst consensus of $254.54 million.
Chief Executive Officer William Staples described several elements of the restructuring. The plan calls for reducing GitLab's country footprint by as much as 30%. Currently operating in nearly 60 countries, the company said it will exit markets where it maintains only small teams.
In addition to the geographic pullback, GitLab intends to flatten parts of its corporate structure by removing up to three layers of management in specific functions. The reorganization of research and development will break R&D into 60 smaller, autonomous teams with the stated goal of speeding product delivery.
Company management said it plans to reinvest the majority of savings generated by the layoffs into strategic growth initiatives. The firm described a future in which software construction is largely automated by machines while humans continue to provide direction and judgment.
Internal operations are also targeted for change. GitLab plans to "rewire" internal processes by deploying AI agents to automate tasks such as reviews, approvals and handoffs. Staples told staff that roles across the company will be "right-sized" to align with this automated operational model.
The company did not provide a final headcount or the specific financial impact of the workforce reductions in the filing. Management said it will disclose the final scope and quantify the financial effects during the June 2 earnings call.
Context and next steps
Investors received confirmation of existing revenue guidance alongside structural changes intended to reposition the business for an AI-centric operating model. The company plans to exit certain national footprints, pare management layers, reorganize R&D into 60 autonomous teams, and apply AI to routine internal processes. Details on the ultimate size and cost of the workforce reduction will be presented on the June 2 earnings call.