In April this year, Fiverr CEO Micha Kaufman urged staff to upskill and adapt or be left behind by AI. Last week, the firm cut 30% of its workforce as it transitions to an ‘AI-first’ company.
In a post on X last week, Kaufman revealed the company intends to cut 250 employees in a bid to drive efficiency and become a company that’s “leaner and simpler, dreams bigger, and builds faster”.
“This transformation requires a painful reset, and 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,” he wrote.
“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 sweeping cuts come just five months after the chief executive called on staff to embrace AI tools in their daily activities and pursue training opportunities to adapt to changes brought about by the technology.
“AI is coming for your jobs,” he told staff in April. “Heck, it’s coming for my job too. This is a wake-up call”.
Staff who failed to upskill would “face the need for a career change in a matter of months,” Kaufman warned in the company-wide memo.
AI job losses are now a recurring trend
Fiverr’s move marks the latest in a string of AI-related workforce cuts across the tech industry in recent years. While the trend has clearly been gathering pace, the framing by those initiating cuts has often been confusing.
As ITPro previously discussed, many companies have issued cuts under the guise of “driving efficiency” or “pursuing high-growth” areas, which more often than not translates to layoffs aimed at automating roles or freeing up cash to invest in the technology.
Dropbox announced plans on this front in 2023, while in February Workday revealed plans to cut its workforce by 8.5% – equivalent to around 1,750 roles – in direct response to its sharpened AI focus.
In a statement at the time, CEO Carl Eschenbach said market conditions and advances in the technology meant the firm had to reassess where its key focus areas lie.
“Companies everywhere are reimagining how work gets done, and the increasing demand for AI has the potential to drive a new era of growth for Workday,” Eschenbach told staff.
“This creates a massive opportunity for us, but we need to make some changes to better align our resources with our customers' evolving needs.”
Some execs might rue their decision
While a significant number of companies pursuing these strategies have stuck with them, some are wavering and finding out the hard way that automation isn’t the be-all and end-all.
A study from Orgvue in May found 39% of UK business leaders had cut staff due to AI adoption in the last year, but more than half (55%) of those admitted they acted too hastily.
Chief among the companies rushing into AI cuts was Klarna, whose CEO Sebastian Siemiatkowski boasted about its AI tools taking up the work of some 700 employees. The company froze hiring in customer service roles in response to its initial success on this front.
However, in June Siemiatkowski revealed Klarna plans to slow down AI job cuts and begin hiring human workers again, per Bloomberg reports.
Duolingo also announced plans to become an “AI-first” company akin to Fiverr, which sparked controversy over the prospect of looming job cuts. CEO Louis von Ahn later clarified the company’s stance, insisting it “never laid off any full-time employees”.
Regardless, the company still cut around 10% of its contractors as a result of AI adoption.
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