Cloud developer tools startup Replit lays off 20% of its workforce amid generative AI push

Developer tooling startup Replit Inc., which has emerged at the forefront of the push toward generative artificial intelligence coding, has announced it’s letting go of 30 of its staff, or just under 20% of its total workforce.

The news came via an email from Replit Chief Executive Amjad Masad to the company’s employees, which was posted today on X, formerly Twitter.

In the email, Masad said the company has “decided to part ways with 30 of our exceptional colleagues.” He stressed that it was a difficult decision, but one that was deemed necessary to ensure Replit can achieve its mission and deliver long-term success.

Replit, which has raised more than $200 million in funding, including a $100 million round in April 2023, had about 170 employees on its staff at the time the layoffs were announced, according to PitchBook data.

The startup is best known for its browser-based integrated development environment, which provides an alternative to the traditional desktop applications typically used by developers. The advantage of having a browser-based IDE is that it’s much easier for developers to get up and running, since there’s virtually nothing to set up prior to launching the platform, unlike with desktop-based IDEs that can take several hours to configure. With Replit, developers can simply navigate to the right URL and immediately start coding.

Replit recently has made a big push to integrate generative AI capabilities into its coding tools. Just last month, it debuted a product called Replit Teams, which is similar to GitHub’s popular Copilot tool. It provides an AI agent that works alongside developers in real time to suggest fixes for coding errors or recommendations to improve the efficiency of the code they write.

The company, which boasts more than 20 million users, is betting on the belief that AI will transform the way code is written. It’s not clear if Replit intends to replace its workers with AI, but the layoffs are nonetheless a reminder of the human cost of this kind of innovation.

Masad said in the email to employees that the company intends to infuse AI into every aspect of its coding platform. He said Replit is not in the business of selling AI, but rather “selling a dream, which is to make your dream software more accessible and make programming more accessible.”

Sent this email to our team earlier this morning. pic.twitter.com/VDZsxzVqaw

— Amjad Masad (@amasad) May 16, 2024

The CEO didn’t say which departments or roles are affected, but insisted it was a tough decision to make and that all laid-off employees will be supported in their transition. He also promised four months of severance pay and said he will waive the usual vesting cliff for employees’ stock options, so they can decide to sell them if they wish. They’ll also get to keep their company-provided laptops, he said.

Replit’s layoffs come amid a broader trend that has seen numerous technology companies lay off staff in the last couple of years. Examples include Google LLC, Meta Platforms Inc., Amazon.com Inc. and Replit’s competitor GitHub, which last year cut 10% of its workforce.

Image: Replit