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Gitlab to lay off 7% of staff

about.gitlab.com

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Re: Gitlab to lay off 7% of staff

#41

Post by notinfuriated »

PaywallBuster wrote: post #17
devhead wrote: post #3

jumping on the bandwagon.

unlike other companies Gitlab is _still_ not profitable https://ir.gitlab.com/news-releases/news-release-details/git... Fiscal Year 2022 Highlights: Total revenue of $252.7 million GAAP operating margin of (51)%; Non-GAAP operating margin of (39)% hence cutting costs before borrowing money becomes too expensive (0% interest rates are gone)

Interesting. Looks like the bulk of their spend is on sales and marketing, which I suppose makes sense in that these companies require using this kind of money to acquire new customers. But obviously that spells out the questions, how sustainable is this business model, and also, how much of this are they decreasing in addition to or as part of the layoffs?

This is on the Condensed Consolidated Statements of Operations. Total OpEx: 351,625; Sales and Marketing as part of that is 190,754 or about 54% of their operating expenses. I don't read finance statements that often so I don't know how normal this is for the industry.

Re: Gitlab to lay off 7% of staff

#42

Post by grey-area »

digdigdag wrote: post #33
naikrovek wrote: post #9

Are layoffs like a fashion statement, now? "Look, we're cool, too!" why is everyone doing this at the same time?

1. The federal interest rate is nearly at 5%. Any business operating depending on lines of credit are going to hurt (Source: https://www.federalreserve.gov/releases/h15/ ) 2. Consumer spending is down (Source: https://www.bea.gov/data/consumer-spending/main ). So you have the producers spending more to operate, and consumers spending less. This leads to an inevitable contraction in the economic output. Also known as…

This is the correct answer. The Fed rate is the main driver for these layoffs. The fed is trying to cause a slowdown in the economy (including layoffs) in order to temper inflation.

Re: Gitlab to lay off 7% of staff

#43

Post by likeabbas »

dboreham wrote: post #35
gerhardhaering wrote: post #32

Ok, 7%. With all the cost, I wonder if just stopping hiring and letting normal attrition rate play out would have had almost the same effect.

No because some of the effect is to instill fear.

Not just fear. It's to flatten the salaries that spiked during covid

Re: Gitlab to lay off 7% of staff

#45

Post by tyingq »

naikrovek wrote: post #9

Are layoffs like a fashion statement, now? "Look, we're cool, too!" why is everyone doing this at the same time?

Some of it is that other companies doing it provides PR cover, where it's sort of implied that "It's not just us, look...we're posting similar reasoning".

Re: Gitlab to lay off 7% of staff

#46

Post by pydry »

koolba wrote: post #21
naikrovek wrote: post #9

Are layoffs like a fashion statement, now? "Look, we're cool, too!" why is everyone doing this at the same time?

Besides the economic realities of companies selling shovels to out of work miners, companies always have people they want to layoff but generally want to avoid both the confrontation and publicity. Once the flood gates open up by your competitors or the sector as a whole starting layoffs, it makes sense to get your own house in order.

Occams razor suggests that if the trend were kicked off by wildly profitable companies that have previously been fined for wage fixing then the cost of capital might not be the whole story.

Re: Gitlab to lay off 7% of staff

#47

Post by eugenekolo »

PaywallBuster wrote: post #17
devhead wrote: post #3

jumping on the bandwagon.

unlike other companies Gitlab is _still_ not profitable https://ir.gitlab.com/news-releases/news-release-details/git... Fiscal Year 2022 Highlights: Total revenue of $252.7 million GAAP operating margin of (51)%; Non-GAAP operating margin of (39)% hence cutting costs before borrowing money becomes too expensive (0% interest rates are gone)

I'm honestly surprised they're not profitable. The cloud tax and cost to acquire new customers is just too high I guess.

Re: Gitlab to lay off 7% of staff

#48

Post by shagie »

gerhardhaering wrote: post #32

Ok, 7%. With all the cost, I wonder if just stopping hiring and letting normal attrition rate play out would have had almost the same effect.

Attrition tends to happen with the most qualified individuals leaving for other companies.

Attrition is not targeted or evenly distributed (depending on the goals). This can result in what would later be perceived as being lopsided compared to the layoff cut. For example (and purely made up), if part of the layoff was to cut back on marketing of the self hosted instances, then you would be looking to lay off marketing, and developer evangelists. However, if attrition doesn't hit those roles (because who's going to be leaving in this economy), you can have it take much longer to scale back that headcount. Saying to the developer evangelist "ok, we don't have something for you to do, we're going to switch you back to an entry level developer position with this other set of roles and responsibilities with a corresponding pay cut" isn't something that can be done easily.

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