Fiverr’s shift to an AI-focused model is driven by a desire to create a “leaner, faster” organization with a modern, AI-driven tech infrastructure, as Kaufman detailed in a letter to employees shared on LinkedIn. The company, which connects freelancers with clients for services like graphic design, writing, and programming, is automating internal systems to boost efficiency and reduce management layers. This restructuring, described as a return to “startup mode,” prioritizes agility and productivity, with plans to reinvest savings into AI-native talent and growth verticals.
The pivot reflects broader industry trends, with tech giants like Salesforce, Microsoft, and Meta also integrating AI to streamline operations. Kaufman foreshadowed this move in a May 2025 CBS News interview, warning that “AI is coming for your jobs. Heck, it’s coming for my job too,” signaling the transformative potential of AI in reshaping even high-level roles. By adopting AI for customer support, fraud detection, and marketplace operations, Fiverr aims to enhance its platform while achieving a 25% adjusted EBITDA margin by 2026, a year ahead of schedule.
Impact of the Layoffs
The layoffs, affecting roughly 250 of Fiverr’s 762 employees as of December 2024, primarily target staff in Israel but ripple across its global operations. While specific roles impacted weren’t disclosed, Fiverr assures that marketplace activities will remain unaffected in the short term, with freelancers continuing to connect with clients seamlessly. The reduction will create a flatter organization, with fewer management layers and higher individual productivity, according to Kaufman’s memo.
This move follows a pattern seen across the tech sector, where companies like Salesforce (cutting 4,000 customer service roles) and Workday (1,750 layoffs) have used AI to reduce headcounts. Fiverr’s stock saw a modest uptick post-announcement, reflecting investor optimism about cost savings, but a 4% dip in share value indicates lingering concerns about long-term impacts, particularly on freelancer trust.
Challenges for the Gig Economy
Fiverr’s AI pivot raises questions about its core user base—freelancers who rely on the platform for income. Posts on X highlight mixed sentiments, with some users criticizing the “AI-pocalypse” as a threat to human creativity and others noting the irony of a freelance platform cutting jobs to automation. Data from competitors like Upwork, which has seen revenue growth through AI-backed enterprise services, suggests that over-reliance on automation could risk user retention if human elements are diminished.
Freelancers offering services like music production, voice acting, or graphic design may face increased competition from AI tools, as Kaufman acknowledged in his essay on X. However, Fiverr plans to empower its remaining freelancers with AI tools, enhancing their ability to deliver high-margin services. The company’s $625 million investment in clean energy and AI in 2024, part of a broader industry trend, aims to support this transition, but the balance between automation and human creativity remains delicate.
What This Means for Businesses and Freelancers
For businesses using Fiverr, the AI-first shift promises improved platform efficiency, potentially lowering costs for services like workflow automation and AI-driven content creation. Fiverr’s focus on enterprise budgets and long-term projects, as Kaufman noted, could attract larger clients, expanding opportunities for freelancers in high-growth verticals. However, the layoffs signal a challenging period for employees, with 250 now potentially joining the platform as freelancers themselves, as noted by TechRound.
Freelancers must adapt to an AI-augmented landscape, leveraging tools to enhance their offerings while competing with automated solutions. Fiverr’s investment in upskilling its remaining workforce suggests a commitment to supporting human-AI collaboration, but the transition may be rocky for those affected by the cuts.
Navigating the Transition
Fiverr’s restructuring, effective immediately, is part of a broader plan to maintain competitiveness in the gig economy. Users can expect continued platform stability, with no immediate disruptions to project postings or payments. Businesses and freelancers should monitor Fiverr’s blog and LinkedIn for updates on new AI tools and training programs, which could roll out by Q1 2026. For laid-off employees, exploring freelance opportunities on Fiverr or competitors like Upwork may offer a path forward, though market saturation remains a concern.
As Fiverr implements these changes, Friday’s investor call may provide further clarity on the company’s AI strategy and financial outlook. For now, the pivot underscores the transformative power of AI in reshaping not just Fiverr but the entire gig economy.
