DevOps company GitLab plans to reduce its workforce by 7%

GitLab, the big DevOps company, has revealed today in an official statement that it will reduce the size of its team by 7%. This decision will affect over 100 employees out of its over 1500 global employees.

The decision to lay off staff is in trend with similar decisions from every other tech company that has laid staff off in recent months, the current macroeconomic conditions and the need for cost reduction.

Speaking on this decision, Sid Sijbrandij, GitLab CEO, said in the blog post,

This was a very difficult decision, and I understand this may be unexpected to some of you. I’d like to give some context about how we arrived at this outcome. I had hoped reprioritizing our spending would be enough to withstand the growing global economic downturn. Unfortunately, we need to take further steps and match our pace of spending with our commitment to responsible growth.

Affected employees will be granted severance packages, equity grants, and premium healthcare services for the next six months. All members get to keep their hardware, home office equipment, and career support as they transition into the next phase of their lives.

We are sad to say goodbye to talented team members who have played an integral part in GitLab’s journey to date, and I am thankful for their significant contributions. I am sorry to see them leave the company because of this decision, he added.

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GitLab’s economic downturn

It has been a tough year for the technology industry, with most big tech companies announcing staff cutbacks. Asides from the economic downturn, many companies are also taking a more cost-effective and conservative approach to stabilize their revenue growth chart.

For GitLab, it has not been an easy race. The tech company went public on the Nasdaq over a year ago and is one of the world’s largest all-remote companies. They are 100% remote, with no company-owned offices anywhere on the planet. However, its shares have suffered a downturn in the last few months.

Speaking on the economic downturn, Sid Sijbrandij, GitLab CEO, said,

The current macroeconomic environment is tough, and as a result, companies are still spending but they are taking a more conservative approach to software investments and are taking more time to make purchasing decisions.

According to Yahoo Finance, GitLab’s share price went down 54% in 2022, way worse than the market loss of 22%. The share price decline deepened in the Q3 of 2022, down 16%, and analysts suggested investor unenthusiasm might have caused the decline.

In a report by TechCrunch. The market capitalization of GitLab is currently about $7 billion, which is significantly less than its $15 billion IPO day valuation and its $19 billion peak.

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