I don't know about gitlab, but tech companies (Meta and Grab) tend to hack off the bottom of the management chain, instead of cutting off the top (aka as the people that created the 8 layer system).
bottom level teams are merged to form larger teams.
Yeah, they never fire the VPs and SVPs in this process. Just a bunch of the hard-working line managers who are actually involved in the day-to-day engineering work
Companies are shaped more or less like pyramids. If you want to cut a meaningful amount of people from the organization, there's just not enough of them at the top.
If one person at the top of the pyramid earns 100 times what people at the bottom earn, cutting a few of them is still meaningful. Also, cutting a single/few person(s) that are mismanaging the whole organization is extraordinarily valuable too.
But salaries - sorry, operational costs - are an inverted pyramid.