GitLab to cut 350 jobs and exit 22 countries as part of restructuring plan

GitLab has unveiled plans to eliminate around 350 jobs and withdraw operations from 22 countries as part of a broader restructuring programme aimed at streamlining its global business, even as the company reported stronger revenue growth and improved profit guidance.

The San Francisco-based software firm disclosed the details alongside its first-quarter fiscal 2027 earnings, according to reporting by Reuters and earnings information published by Investing.com. The workforce reduction represents approximately 14% of GitLab's full-time employees.

The announcement comes as technology companies continue to reassess operating structures amid shifting market conditions and growing investment in artificial intelligence-led product development.

Restructuring expands beyond previously announced workforce cuts

Investors had been awaiting further clarity on a workforce reduction initiative first announced by GitLab in May. The company has now confirmed that the programme will affect roughly 350 employees globally.

Alongside the job cuts, GitLab said it plans to exit 22 countries, reducing its geographic footprint by approximately 37%.

Key elements of the restructuring include:

• 350 full-time positions to be eliminated
• Workforce reduction equivalent to around 14% of employees
• Exit from 22 countries
• Geographic footprint to shrink by approximately 37%
• Expected pre-tax restructuring charges of $30 million to $35 million
• Around $19 million of those charges anticipated in the second quarter

The company did not disclose the specific countries affected by the withdrawal plans.

Revenue growth beats expectations

The restructuring announcement accompanied a stronger-than-expected quarterly performance.

According to company figures reported by Reuters, GitLab generated revenue of $264.2 million in the first quarter of fiscal 2027, representing a 23% year-on-year increase. The company posted adjusted earnings of 23 cents per share.

Analysts had expected adjusted earnings of 21 cents per share on revenue of $254.3 million, meaning GitLab exceeded consensus forecasts on both measures.

The results prompted a positive reaction from investors, with GitLab's Class A shares rising 7.5% in after-hours trading following the earnings release.

AI strategy remains central to growth plans

GitLab has increasingly positioned artificial intelligence at the centre of its product roadmap as software companies face questions from investors about the long-term impact of AI on traditional software development tools.

The company has integrated AI capabilities into its platform through the GitLab Duo Agent Platform, designed to support software development, security and operations workflows.

Commenting on the quarter, Chief Executive Officer Bill Staples said the rise of agentic AI is creating favourable conditions for the business, citing increased platform activity and early traction for GitLab's AI offerings.

The company's focus reflects a wider industry shift towards AI systems capable of carrying out tasks and workflows with greater autonomy rather than simply generating responses to prompts.

Full-year outlook lifted

GitLab also increased its financial guidance for the current fiscal year following the stronger quarterly performance.

The company now expects:

• Fiscal 2027 adjusted earnings of 79 to 82 cents per share
• Previous guidance had been 76 to 80 cents per share
• Full-year revenue guidance increased at the lower end to $1.112 billion
• Previous revenue guidance lower range stood at $1.099 billion

For the second quarter, GitLab forecast adjusted earnings of 17 to 18 cents per share on revenue of $272 million to $274 million.

The revised outlook suggests management remains confident in demand for its software platform despite the restructuring programme and broader uncertainty across the software sector.

As GitLab moves forward with workforce reductions and geographic consolidation, investors will be watching closely to see whether the company's AI-focused strategy and operational streamlining can sustain growth while improving profitability over the coming quarters.