Freelance marketplace Fiverr has announced a major restructuring: the company is laying off around 250 employees, nearly 30% of its workforce, in a move to reposition itself as an AI-first company. CEO Micha Kaufman described the layoffs in an internal memo as part of a broader “reset” to become leaner, faster, with fewer management layers and an infrastructure built around AI.
Why the Change: Growing AI Demands & Efficiency
Fiverr is reacting to several pressures and opportunities:
- Automation & AI Tools Already in Use: Products such as Neo, Fiverr Go, and Dynamic Matching (which use AI for matching, pricing, project scoping) have shown where efficiency gains are possible. These internal tools reduce manual work in customer care, fraud detection, and workflow management.
- Need for Speed and Agility: Kaufman said Fiverr needs to return to “startup mode,” simplifying its structure so it can adapt faster. The company wants fewer layers of management, streamlined operations, and quicker internal decision-making.
- Cost Savings & Reinvestment: By reducing headcount, Fiverr plans to reinvest some savings into AI infrastructure, enterprise‐oriented projects, and growth verticals. Another portion will go toward improving margins (Adjusted EBITDA).
Key Figures & Impacts
| Metric | Data |
|---|---|
| Number of employees before layoffs | ~ 762 (end of 2024) |
| Number of employees being let go | ~ 250 (≈ 30%) |
| Remaining staff expected | Just over 500 people |
| Areas with AI impact | Customer support automation, fraud detection, marketplace matching, marketing |
Fiverr has said marketplace operations for freelancers and buyers should not see material disruption in the near term.
What “AI-First” Looks Like for Fiverr
Some of the ways Fiverr is embedding AI more deeply:
- Smarter Matching & Scoping: Tools like Neo and Dynamic Matching use machine learning / AI to better connect buyers and freelancers.
- Automated Customer Support / Fraud Detection: AI helps consolidate knowledge bases, speed up responses, and detect suspicious behavior without manual reviews.
- Technology Infrastructure Overhaul: Building cleaner, simpler, more modern systems that support AI; trimming down layers of management to flatten structure for faster decisions.
Risks & Challenges Ahead
While the move is ambitious, it comes with several challenges:
- Morale & Talent Retention: Layoffs of this size can hurt morale, especially for remaining employees. Ensuring that the “reset” doesn’t lead to burnout, disengagement, or loss of key people will be important.
- Balancing Human + Machine: Since Fiverr is a marketplace connecting freelancers, some of the value depends on human talent. Over‐automation could risk degrading service quality, or alienating freelancers who feel replaced or marginalized.
- Product Reliability & AI Oversight: Ensuring AI models work correctly, don’t introduce bias, don’t misclassify content or misuse data, and maintain fairness in matching and pricing is crucial. Mistakes or missteps could damage trust with users.
- Competitive Pressure: Other platforms and marketplaces are also integrating AI. Fiverr will need to deliver meaningful user impact (for freelancers and buyers) beyond just internal efficiency to stay competitive.
- Regulatory / Ethical Concerns: As AI becomes core, issues of privacy, data usage, intellectual property, model transparency, etc., will come into sharper focus.
What This Means For Freelancers, Buyers & Users
- Freelancers: Could see more AI‐assisted tools to help with pricing, matching, project proposals. But also possibly increased competition, changing expectations, or shifts to higher value engagements.
- Buyers (businesses, individuals hiring): May get faster matching, better scoping, possibly more accurate price estimates, and tools that help simplify hiring process. But risk if AI mismatches expectations or automations miss nuance.
- Platform Reliability: Fiverr says marketplace services won’t be disrupted. But users will be watching how smoothly new AI changes are rolled out.
How It Fits Into Broader Tech Trends
- Many tech companies are reducing workforce and shifting resources toward AI / automation. Fiverr’s move mirrors broader industry trends. mint
- The gig economy is under pressure: clients and platforms are looking for ways to reduce cost, increase speed, use AI to fill gaps. Platforms with strong AI capabilities may gain advantage.
- AI adoption is not optional for many competitive tech businesses now — speed, agility, productivity, and delivering machine-assisted value are increasingly critical.
Conclusion
Fiverr laying off ~250 employees and declaring itself “AI-first” marks a major inflection point. It’s a bet that leaner organizations, smarter tools, and automation can deliver greater agility and margin in a fast-evolving market. But execution will matter: balancing human value and AI efficiency, maintaining trust with freelancers, and preserving platform quality will all test whether this move pays off. For now, Fiverr is making a strong statement about where it believes the future lies.
