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The Israeli multinational online marketplace for freelance services is laying off 250 work forces as it pivot into becoming an 'AI-first company.' This move was share on X, formerly Twitter by the company's CEO Micha Kaufman. The layoffs will affect about 30% of Fiverr’s workforce.
Kaufman said the layoff is a shift back into “startup mode,” explaining that his vision is to reshape Fiverr into an AI-driven company that operates with a leaner structure, quicker pace, modernized AI-centered technology, a reduced but more productive workforce, and a flatter management hierarchy.
This is a big update I just shared with the team. We are turning Fiverr into an AI-first company that’s leaner and simpler, dreams bigger, and builds faster.
Micha Kaufman said in the X's blog post.
Meanwhile, it's important to note that it's no longer a big deal in the tech ecosystem and among tech companies to cut jobs in a focus to pivot into AI-driven company. If you can recall, we've seen similar moves in Duolingo where the the most popular language-learning app worldwide plans to become "AI-first" in April.
In addition to that, similar scenario happened in an American on‑demand (cloud-based) financial management, human capital management, and student information system software vendor, Workday, who announced plans to eliminate 1,750 roles in February 2025.
However, the Fiverr's job cuts affect fewer people than a larger firm like Workday. Kaufman argues that the company no longer requires as many employees to run its operations, since AI has already been woven into areas like customer support and fraud prevention.
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Reinventing into AI-driven Company
Fiverr has already integrated AI into areas like customer support and fraud detection, which it says reduces the need for as many employees. Savings from the layoffs will partly go toward strengthening the company's AI infrastructure and hiring specialized talent in this area.
The layoffs are part of a strategy to generate cost savings. So, in addition to reinvested the savings into AI talent and infrastructure, the cost savings are also expected to improve margins (especially Adjusted EBITDA). For example, JPMorgan sees this restructuring as potentially delivering long-term gains.
Kaufman also justified AI restructuring in an interview with CBS News in May, where he specifically advised employees to implement 100% AI in their works. He also claimed that doing that wouldn't make them replaceable because they could still contribute through “non-linear thinking” and making “judgment calls.”
But it's unfortunate that the advice seems not to favour Fiverr's employees. Importantly, Fiverr has emphasized that the changes won’t affect its core marketplace in the near term. The purpose is to modernize its tech stack and increase productivity across a smaller team, and at the same time keeping customer experience stable.
That said, as we’ve discussed the beneficial impacts of the layoffs on the company, it’s important that we also talk about the potential risks, challenges, and questions. It's important to note that the transition comes with risks. A workforce reduction of this scale can damage morale, strain company culture, and make it harder to retain top talent.
Execution will also be critical because what it takes to adopt AI successfully is more than just cutting employees' jobs—it demands for good investments, responsible implementations, and innovations that customers actually want and value.
The company will also need to tread carefully when balancing automation with human oversight. For example, in areas where empathy, creativity, or complex judgment matters, AI can’t fully replace people.
Furthermore, people will criticize the company if it falls short on its AI ambitions. In addition to that, the company will also risks losing ground to competitors. Overall, criticism will ask and blame the company about how its restructuring affects its employees.
