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- They are planning to reduce the number of countries where they operate by up to 30%. GitLab has employees spread across a large number of countries, with 18 listed in their public employee handbook and operating in nearly 60 countries. The handbook used to document payroll workflows for these countries but was discontinued in 2023. Since we don’t know which of those 60 countries have small teams, we can’t calculate how many countries the reduction will apply to.
- They plan to flatten their organization by removing up to three layers of management in some functions, bringing leaders closer to the work. This is not GitLab’s first such announcement; Coinbase recently announced a more aggressive version: “flattening our org structure to 5 layers max below” and “No pure managers: Every leader at Coinbase must also be a strong and active individual contributor. Managers should be like player-coaches.”
- In terms of team structure, they are reorganizing Research & Development (R&D) into approximately 60 smaller, more empowered teams with end-to-end ownership, nearly doubling the number of independent teams. This aligns well with the idea of individual teams that can operate features unblocked by other teams.
- Their new values framework is “Speed with Quality, Ownership Mindset, Customer Outcomes,” and one sub-bullet under this reads: “Interpersonal excellence: individuals who are good humans, embrace diversity, inclusion and belonging, assume good intent and treat everyone with respect.” The removal of the value “Diversity” from their previous framework suggests a shift in focus.
One part of their new strategy resonated deeply with me:
The agentic era multiplies demand for software. Software has been the force multiplier behind nearly every business transformation over the last two decades. The constraint was the cost and time required to produce and manage it. That constraint is collapsing. As the cost of producing software collapses, its demand will expand. Last year, the developer platform market used to be measured in tens of dollars per user per month; this year, it’s hundreds/user/month and heading towards thousands. Not only does the value of software for builders increase, but we believe there will be more software and builders than ever before, serving an increasing volume of both.
This very much encapsulates my optimistic view, informed by the Jevons paradox.
Note that GitLab’s stock price has dropped significantly over this period, from ~$52 a year ago to ~$26 today. This could reflect uncertainty about GitLab’s continued growth in an environment where agentic engineering is eating into their core market. If your entire business depends on software engineering growing as a field and producing larger volumes of more lucrative seats, you have a strong incentive to believe that agents will indeed have this effect!
Tags: 37signals, careers, AI, GitLab, coding-agents, Jevons Paradox, agentic-engineering
Key Takeaways
- The reduction in the number of countries where GitLab operates is contingent on knowing which have small teams.
- The organizational flattening aims to bring leaders closer to the work, similar to what Coinbase has announced.
- The new values framework places a strong emphasis on interpersonal excellence and diversity within this context.
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