GTLB Stock In Spotlight After-Hours On AI-Focused Layoffs And Earnings Beat

• GitLab said that the cuts are designed to simplify its structure, reduce costs, and focus more sharply on its highest-priority initiatives, including AI-powered tools.
• GitLab delivered a solid first quarter, with revenue beating Wall Street expectations and earnings rising year-over-year. 
• CFO Jessica Ross called the quarter “strong” and noted the company now has the financial flexibility to invest in its biggest opportunities while continuing its share-buyback program.

GitLab Inc. (GTLB) shares gained more than 4% in after-hours trading on Tuesday before reversing trajectory to trade 8% lower after the company announced a major restructuring plan that will cut around 350 jobs, or roughly 14% of its global workforce.

The move comes as part of a broader shift across the tech sector, where companies are increasingly reallocating resources toward artificial intelligence initiatives.

The San Francisco-based SaaS (Software-as-a-Service) provider said the cuts are designed to simplify its structure, reduce costs, and focus more sharply on its highest-priority initiatives, including AI-powered tools. The company will also shrink its geographic footprint by about 37%, impacting operations in 22 countries.

It expects to record one-time restructuring charges of $30 million to $35 million, mostly for severance and related costs, with the bulk hitting the current quarter and the rest spread over the next three quarters. The changes should be largely complete by the end of fiscal 2027, GitLab said.

GTLB’s Q1 Print

Despite the headline-grabbing layoffs, GitLab delivered a solid first quarter. Revenue for the three months ended April 30 rose 23% to $264.2 million, easily beating the roughly $254.52 million Wall Street had expected. The company posted an adjusted operating margin of 14%, up two points from a year earlier, and adjusted and diluted net income of $0.23 per share, compared to $0.17 in the corresponding quarter of the previous fiscal year.

Looking ahead, GitLab offered guidance that was slightly below some analyst forecasts. For the current quarter, it expects revenue of $272 million to $274 million and adjusted net income per share of $0.17 to $0.18. For the full fiscal year, it forecast revenue of $1.112 billion to $1.118 billion and adjusted earnings per share of $0.79 to $0.82.

Executives Weigh In

CEO Bill Staples pointed to “structural tailwinds” from the shift to agentic AI and said GitLab’s all-in-one platform gives it an edge with large enterprise customers who want a single control plane for the entire software lifecycle. “We are evolving GitLab to be the trusted enterprise platform for software creation in the AI era,” he said.

CFO Jessica Ross called the quarter “strong” and noted the company now has the financial flexibility to invest in its biggest opportunities while continuing its share-buyback program. She added that the restructuring will help the team “invest deliberately behind our highest-return initiatives.”

How Did GTLB Retail Traders React?

On Stocktwits, retail sentiment around GTLB stock stayed within the ‘extremely bullish’ territory over the past 24 hours, while message volume rose from ‘high’ to ‘extremely high’ levels.  

A Stocktwits user applauded the earnings as “solid” and voiced hopes for a rally on Wednesday.

Another user, however, said they see no potential in the stock.

GTLB stock has fallen 30% over the past 12 months. 

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