Fiverr Cuts 30% of Employees in Shift Towards an AI-Led Direction
In a significant shift, Fiverr, the popular gig economy platform, is moving towards becoming an 'AI-first company.' This strategic pivot, announced by the company's CEO, Micha Kaufman, aims to flatten management, speed up decision-making, and rebuild the platform around AI tools.
According to recent data, Fiverr's revenue for 2024 stood at approximately $391 million, a notable increase from the $361 million earned in 2023. However, the company's growth is in the 8-12% range, suggesting that competition is heating up in the gig marketplace.
Despite the growth, it's worth noting that most of the gross merchandise value on Fiverr comes from repeat customers. New users contribute less to the platform's total value.
Fiverr's workforce reduction by 30%, which equates to approximately 250 people, indicates a shift towards increased reliance on AI. The company plans to lean harder into automation to cut costs and speed things up.
The focus of the gig economy is no longer solely on cheap labor at scale, but also on technological advancements and efficiency. For freelancers and clients, Fiverr's next phase may feel less like a marketplace and more like a test of AI's capabilities in reshaping online work.
The company's processes, including ordering gigs and payments, already run with minimal human input. Fiverr aims to roll out smarter tools for freelancers and clients through increased automation.
This AI-first strategy mirrors similar pivots already observed in companies like Salesforce and Google. The term 'AI-first' for Fiverr implies potential improvements in matching freelancers and managing projects, but also potential displacement of simpler gigs.
The marketplace moves more than $1.1 billion in gross merchandise value, but the active buyer base has stalled at around 4 million users. Despite these figures, Fiverr's revenue, when considering the trailing twelve months, is closer to $419 million.
As Fiverr embraces AI, it's clear that the gig economy is transitioning towards automation, efficiency, and maximizing usage from existing users. The founder of Fiverr, Micha Kaufman, aims to lead this transformation, positioning the company as a pioneer in the use of AI in the gig economy.
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