Fiverr slashes 30% of workforce in pivot to AI-first future
TEL AVIV-YAFO, ISRAEL — Fiverr, a global freelance marketplace, is laying off 30% of its workforce in a strategic pivot to become an “AI-first” organization.
“Today, we are launching such a transformation for Fiverr, to turn Fiverr into an AI-first company that’s leaner, faster, with a modern AI-focused tech infrastructure, a smaller team, each with substantially greater productivity, and far fewer management layers,” stated Micha Kaufman, Chief Executive Officer (CEO) of Fiverr in a letter.
According to Forbes, the move, attributed not to financial distress but to a fundamental re-engineering of operations, highlights the profound impact artificial intelligence is having on the future of work platforms and the freelancers who use them.
Human workforce shrinks to feed AI efficiency gains
Kaufman’s rationale for the layoffs is that artificial intelligence has fundamentally altered the human resources required to operate the business.
According to the letter published by Kaufman, “As we evaluate what has been done and what can be done, we believe we don’t need as many people to operate the existing business.”
“Sometimes it’s about efficiency, as we’ve seen in customer support, where AI helps the team consolidate knowledge and reduce SLA for ticket resolution,” he added.
This shift is based on internal observations that small, AI-native teams can now accomplish what previously required entire departments, a pattern Kaufman described as “too powerful to ignore.” The company is betting that this leaner, flatter structure will make it inherently faster and more agile.
In a separate report by Reuters, the cuts will affect 250 employees, down from the 762 employees the company had in December. Fiverr’s recent layoffs reflect a broader industry trend in which tech firms are leveraging AI to automate key tasks. This shift is starkly illustrated by Salesforce, which reduced its support staff by 4,000 roles after implementing AI agents to handle customer care work.
On the financial side, Fiverr is positioning this as not a self-retrenchment, but rather as a rebranding effort aimed at increasing profitability. The company also reneged on its current financial targets and expects to fulfill one of its key profitability objectives, a 25 percent adjusted EBITDA margin, over one year earlier than 2026.
The savings from the lower payroll will be invested in new areas of growth, indicating that the reductions are a tactical reallocation of resources and not a mere cost reduction measure. This makes the layoffs an offensive strategy to enhance future innovation, rather than a defensive response to market forces.
Fiverr bets on AI to augment freelance talent
Beyond internal efficiency, Fiverr’s transformation is a wager on enhancing the core marketplace experience through AI. The company has already deployed AI in tools like its Neo matching service and Dynamic Matching algorithms to improve how freelancers connect with clients.
The next phase involves accelerating this integration across its entire infrastructure, from project matching and quality assurance to fraud detection, which has already improved through machine learning. The company has already deployed AI in tools such as its Neo matching service and Dynamic Matching algorithms to enhance how freelancers connect with clients.
This is transferred to the actual freelancers, whom Fiverr thinks will not be displaced by AI, but instead enabled. Kaufman assumes that the technology will be a force multiplier for human creativity, as freelancers will be able to scale their individual talents and take on more complex jobs.
The real test will be whether this AI-enhanced vision can deliver greater value without compromising the quality and trust that are essential to a freelance marketplace.
“We’re not starting over – we’re building on everything we’ve accomplished together,” Kaufman concludes in his letter.
