Marketplace platform cuts 250 jobs in restructuring aimed at embedding artificial intelligence at the core of its operations.

Fiverr International will cut almost a third of its workforce as part of a sweeping restructuring designed to make the Israel-based marketplace an “AI-first company”.

The company confirmed on Monday that about 250 employees will be laid off, representing around 30 per cent of its headcount. Fiverr reported having 762 employees at the end of 2023.

Chief executive Micha Kaufman said the decision reflected a strategic shift to accelerate artificial intelligence across the platform and internal operations. “We are launching 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,” Kaufman told employees in a letter, reported Reuters. 

Doubling down on automation

Fiverr has built its business as a digital marketplace connecting freelancers with individuals and companies seeking services such as design, editing and software development. Most of its processes, including ordering, delivery and payments, are already automated.

The company now intends to extend automation further, relying more heavily on machine learning and generative AI. The cuts will reduce management layers and restructure teams around what Kaufman described as “greater productivity”.

A spokesperson said the layoffs would not materially affect Fiverr’s ability to operate the marketplace in the near term. Some of the savings from payroll reductions will be reinvested in AI-focused initiatives and product development.

The decision places Fiverr among a growing list of technology companies turning to artificial intelligence as both a growth driver and a cost-cutting measure. Larger players including Salesforce have restructured teams this year to bring AI tools into customer support and logistics functions.

The Wall Street Journal noted that, like many digital platforms, Fiverr is under pressure to demonstrate efficiency and profitability in an uncertain economic climate. By reorienting its operations around AI, it hopes to reassure investors while competing with rivals experimenting with similar technologies.

The company has not disclosed which roles will be affected. Given Fiverr’s reliance on automation for its core marketplace, analysts suggest support, operational and managerial positions may be most vulnerable.

The cuts underscore the challenge of balancing technological adoption with human oversight. While automation can streamline costs, Fiverr’s model also depends on maintaining trust between freelancers and clients. Over-reliance on AI in dispute resolution or customer support could risk eroding that trust if not managed carefully.

Kaufman acknowledged the human cost of the restructuring but framed the move as necessary for long-term competitiveness. “This is a transformation to build a company for the future,” he wrote.