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GitLab announces AI layoffs, stock goes down 9% (pivot-to-ai.com)

submitted 21 hours ago by dgerard@awful.systems to c/techtakes@awful.systems

11 comments fedilink hide all child comments

seize the day!

https://www.youtube.com/watch?v=8yk_M88Wc8U&list=UU9rJrMVgcXTfa8xuMnbhAEA - video
https://pivottoai.libsyn.com/20260512-gitlab-announces-ai-layoffs-stock-goes-down-9 - podcast

time: 4 min 53 sec

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[–] fiat_lux@lemmy.zip 18 points 17 hours ago* (last edited 7 hours ago) (3 children)

No surprises here. Their cash flow suggests they were heavily leveraged on crypto (Edit: or other unusual spending, the crypto part is speculation, they officially claim to have no crypto), -776% y/y change for investments in 2026. Not as bad as their 2023 -1,023%, but their new CFO has an uphill battle ahead of her.

I can see them being on the 2027 casualty list. They've been pushing AI hard internally the last year or so, which caused me some issues at my workplace after their misplaced confidence led them to call out my niche as an "opportunity" they had "mostly solved". Spoilers: They hadn't then, visibly still haven't now, and will have less chance doing so by adding more AI because it is particularly terrible at this niche.

[–] Ildsaye@hexbear.net 2 points 2 hours ago

pushing AI hard

sling slop watch it flop

[–] V0ldek@awful.systems 5 points 11 hours ago (1 children)

Their cash flow suggests they were heavily leveraged on crypto

Wait what, GitLab was doing crypto? The fuck is going on in those people's heads

[–] fiat_lux@lemmy.zip 3 points 10 hours ago

Total speculation on my part. They could have blasted that cash on orgies for all I know.

[–] VeganCheesecake@lemmy.blahaj.zone 2 points 15 hours ago (1 children)

So they invested in things that didn't come through with borrowed money?

[–] fiat_lux@lemmy.zip 8 points 14 hours ago* (last edited 14 hours ago) (1 children)

I think the "original" money is still mostly from their 2021 IPO, so "leveraged" was the wrong word, my brain is a mess today.

But, they certainly look like they either ate up to a quarter billion loss on crypto gambling, or shuffled the money from that column into a different part of the books to pay for AI, or spent that money on other new investments. I don't think it could be entirely new investments because they've never even hit one billion in annual revenue, their net income has never been positive, and they've had no new acquisitions over the last couple of years. The new CFO in January move also points at a big financial fuckup being the reason.

[–] VeganCheesecake@lemmy.blahaj.zone 6 points 12 hours ago (1 children)

I was just wondering how they could have lost more than a hundred percent on anything if they didn't leverage some sort of debt in a reckless way. Because, like, I'm not a finance person, but I feel like it's hard to lose more than 100% of whatever money you put up otherwise.

[–] fiat_lux@lemmy.zip 3 points 10 hours ago (2 children)

Oh, that percentage is the year on year change, not a return on investment. So 2025 financial year they reported roughly -30 million cash from investments, this year is roughly -267 million, so they reported a loss of (267-30) / 30 = ~7.78 times as much money against the scope of the category "investments".

You'd expect to see the percentage go below zero when you buy more stocks / bonds or securities than you sell or which mature, or (I think) when you take money gained from an investment and then put it towards another investment or other cash category, so it's not necessarily a really bad thing for a company to have a negative number there. It just means they're either shuffling it internally or committed to spending it. The size and timing of the change is what is unusual.

There are all sorts of rules and tricks in this shell game though, I couldn't say with any certainty where that money went, or if it ever really existed at all. I just see a pattern of companies with big negative short term investment cash flows and layoffs that correlate maybe too well with the Bitcoin dump at the end of January.

[–] VeganCheesecake@lemmy.blahaj.zone 2 points 10 hours ago

Thanks, that makes a lot more sense.

[–] dgerard@awful.systems 2 points 10 hours ago

that correlate maybe too well with the Bitcoin dump at the end of January.

ohhh lol holy shit, that'd be a fine thread to pull on

[–] shittydwarf@sh.itjust.works 26 points 20 hours ago

Capitalist layoffs, AI scapegoat