Fiverr cuts 250 jobs as CEO declares shift to AI-first strategy

Fiverr announced on Monday that it will lay off around 250 employees, or roughly 25% of its workforce, as part of a sweeping plan to transform the company into what its founder and CEO Micha Kaufman described as an “AI-first” business.

Full list of Israeli high-tech layoffs in 2025

In a letter to employees, Kaufman said the cuts were necessary to build a leaner, faster company with fewer management layers and a modern technology infrastructure designed around artificial intelligence.

“For months, I've been sharing my thoughts on how AI is reshaping not only work but also the increasingly immersive ways humans and machines interact,” Kaufman wrote. “This will lead to fundamental changes in how societal activities are organized and how businesses operate. The speed at which technology is changing, and the possibilities it brings, are incredible, and they demand new thinking and higher velocity to stay at the top of our game.”

Kaufman said Fiverr had already seen results from deploying AI in products like Neo, Fiverr Go, and Dynamic Matching, as well as in coding, marketing, and customer care. But he argued that the company needed to go further by simplifying its infrastructure and “going back to startup mode.”

“This transformation requires a painful reset,” Kaufman acknowledged. “As we make it, we will be parting ways with approximately 250 team members across the different departments, resulting in a smaller and flatter organization. This is possibly one of the toughest decisions that I have had to make, especially as Fiverr is such a magical place with a strong sense of belonging and mission-driven culture.”

The move comes as Fiverr seeks to reposition itself in a fast-changing labor market shaped by generative AI. Kaufman pointed to opportunities in AI applications, enterprise budgets, and long-term projects as areas where Fiverr must accelerate.

“Over the past year, we have implemented many AI projects across our organization,” he wrote. “We’ve witnessed firsthand how AI can automate and streamline processes, liberate humans from manual and tedious tasks, and unlock capabilities that were historically not possible or too expensive. As we evaluate what has been done and what can be done, we believe we don’t need as many people to operate the existing business.”

Kaufman said the company would reinvest in AI talent and infrastructure, while also expanding its go-to-market efforts in enterprise and other growth segments. Departing employees, he added, will receive severance, extended healthcare, and career transition support.

“To those who will be leaving us: thank you! We do not take your contribution for granted, and we plan to do everything we can to provide you with comprehensive support,” Kaufman wrote.

He reassured Fiverr’s freelance community that their businesses “won’t be impacted in any way throughout this transformation.”

“To our team who’s staying: you are the foundation of what comes next,” Kaufman concluded. “We're not starting over - we're building on everything we've accomplished together.”

Fiverr reported second-quarter earnings in July that revealed strong growth in AI-related services and enterprise offerings that offset a decline in active users on the freelance platform.

Revenue rose 14.8% year over year to $108.6 million, fueled by an 83.8% jump in the company’s Services segment, which includes Fiverr Pro’s Managed Services and other premium offerings. The Marketplace segment, which represents Fiverr’s core freelance platform, declined 2% to $74.7 million.

While the number of active buyers fell nearly 11% from a year earlier to 3.4 million, the average spend per buyer climbed almost 10%, reaching $318. The figures suggest Fiverr is increasingly reliant on fewer but higher-value clients, especially in segments tied to artificial intelligence and managed enterprise projects.

Adjusted EBITDA rose to $21.4 million, up from $17.8 million a year earlier, while free cash flow increased 21% to $25 million. Fiverr reiterated its full-year revenue and earnings guidance, maintaining its 2025 revenue forecast of $425–$438 million and Adjusted EBITDA of $84–$90 million.