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GitLab, a leader in developer operations (DevOps), is the latest tech company to announce a round of layoffs. The company said today that it is reducing its headcount by 7%.
The majority of the major tech companies, including Microsoft, Alphabet, and Salesforce, have announced staff reductions, making 2023 so far difficult for the sector. Like all of these businesses, GitLab attributed its decision to the state of the economy, and more specifically, to its clients’ decreased spending on software.
GitLab cofounder and CEO Sid Sijbrandij stated in a letter to employees that was also posted on its website that “the current macroeconomic environment is tough, and as a result, companies are still spending but are taking a more conservative approach to software investments and are taking more time to make purchasing decisions.”
About 16 months have passed since GitLab went public on the Nasdaq, and its shares haven’t performed all that well. The market capitalization of the remote-first company is currently around $7 billion, significantly less than its $15 billion IPO day valuation and its $19 billion peak a few months later.
The company’s most recent headcount was 1,630, which was disclosed in a 10-K report last year; therefore, the round of layoffs will affect approximately 114 people, though that precise number depends on the company’s actual headcount as of today.
Redirecting our spending, Sijbrandij wrote, “I had hoped would be enough to withstand the growing global economic downturn.” “Unfortunately, we must move forward and slow down our spending in order to maintain our commitment to responsible growth.”
Regarding severance, Sijbrandij stated that all affected employees will receive pay during the “transition period” in addition to a single payment that is roughly equal to four months of base salary. In locations where healthcare is included in their package, he added, employees will continue to receive it for another six months.
