Fiverr cut about 250 jobs to become “an AI-first company” and promised investors a higher margin

At a glance

Company

FiverrOnline marketplace for freelance services

Size

Mid-market (250–999 employees) Fiverr reported 762 employees at 31 December 2024 and 528 at 31 December 2025 in its annual reports. Neither figure includes contractors.

Where and when

Israel (shares listed in New York). September 2025 – July 2026.

Who produced the figures

The company itselfEvery figure on this page comes from Fiverr’s own filings with the US Securities and Exchange Commission: the announcement of the cut, its annual reports and its quarterly results.

What they did

On 15 September 2025 Fiverr’s founder and chief executive, Micha Kaufman, wrote to all staff. He said the company would become “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”. The company would part with “approximately 250 team members across the different departments”. Fiverr filed the letter with the US Securities and Exchange Commission the same day.

The letter gave two reasons:

• AI already did some of the work. “We believe we don’t need as many people to operate the existing business.” He named customer support, where AI “helps the team consolidate knowledge and reduce SLA for ticket resolution” (the agreed time to resolve a support request), and “marketplace integrity and fraud detection”.
• Rebuilding, not adding. The company wanted to rebuild its technology “from the ground up” and go “back to startup mode”, with a flatter structure.

The letter also said what would come next. Fiverr would “aggressively invest in AI”, train its existing staff, hire “top AI-native talent” and sell more to larger customers. Staff who left would get “generous severance, extended healthcare, career transition assistance”.

What Fiverr promised investors

The letter to shareholders filed the same day made three statements:

• The cut would not “materially impact business activities across our marketplace in the immediate future”. Fiverr kept its forecasts for the rest of 2025.
• Part of the saving would be spent again on the business, and the rest would raise profit.
• Fiverr expected to reach its long-term adjusted EBITDA margin of 25% in 2026, “a year ahead of our target”. Adjusted EBITDA margin is the company’s own measure of operating profit as a share of revenue, before items such as share-based pay.

The numbers

From Fiverr’s annual reports:

• 762 employees at the end of 2024 and 528 at the end of 2025, which Fiverr calls “an approximate 30% reduction”. It puts the fall mainly down to the September cut.
• Every department shrank. Customer care went from 127 to 83 people, research and development from 369 to 246, marketing from 157 to 96, and general and administration from 109 to 103.
• $3.4 million of restructuring costs in 2025, mostly payments to staff who left.
• Contractors are not counted. The employee figures exclude contractors. Spending on contractors’ services rose in 2025 in every cost line: by $3.6 million in the cost of running the service, $2.6 million in research and development, $1.4 million in sales and marketing, and $0.5 million in administration.

Fiverr does not report revenue per employee. Its filings give no figure for how much work AI took on in support or fraud detection.

What happened next

• Late 2025: margin up. The adjusted EBITDA margin was 22.4% in the third quarter and 24.7% in the fourth. For the whole of 2025 it was 21.3%, up from 19.0% in 2024. Revenue grew 10.1% to $430.9 million.
• February 2026: an “investment phase”. Fiverr forecast 2026 revenue of $380–420 million, down 3% to 12%, and adjusted EBITDA of $60–80 million. It did not state a margin, and no combination of those ranges reaches 25%. It said the plan would show “measurable progress within the next four to six quarters”.
• July 2026: lower again. Revenue in the second quarter fell 10.0% to $97.8 million, and the margin was 17.9%, down from 19.7% a year earlier. Annual active buyers fell 21.9% to 2.7 million. Fiverr cut its 2026 forecast to revenue of $356–372 million and adjusted EBITDA of $52–62 million. It blamed “AI-related demand and traffic headwinds” and weakness in the kinds of work “most exposed to AI automation”.
• AI products. Fiverr reported early results from its own AI features: Fiverr Go was “a key driver” of its Seller Plus subscription, which grew over 20% in a year, and early tests of new matching for its Fiverr Pro service cut mismatches “by nearly 10%”. These are company figures, without published method.

Fiverr puts the fall in revenue down to AI tools taking over simple, low-value work that customers used to buy on its marketplace. Its filings do not link the fall to the staff cut.

What the case shows

• Separate what a company did from what it said it would do. The cut is recorded in Fiverr’s own annual report: 762 people down to 528. The productivity gain behind it is the chief executive’s belief, with no published figure. The 25% margin for 2026 was a forecast, and Fiverr’s later forecasts point below it.
• “AI-first” here meant fewer people first. The guide on this site describes an AI-first company as one that changes the work, the roles and the rules around AI. Fiverr’s filings show the roles cut. The rebuilt work is still a plan, which Fiverr expected to show progress over four to six quarters from February 2026.
• Count contractors as well as staff. Employee numbers fell by 30%, but contractor spending rose. Ask for both before you judge a cut.
• A cut does not protect a business from AI changing its market. Fiverr cut costs for AI inside the company, while AI reduced demand from its customers.
• Staff were told plainly. The letter gave the number of people leaving, the reason and the support on offer, on the day of the cut. In its next annual report Fiverr named the risks itself: lost knowledge, lower morale and “employee attrition beyond our intended reductions”.

Duolingo, a company of similar size, also called itself AI-first in 2025. There, the chief executive’s memo came with a change to one process, course writing, and the company published its results: 148 courses in under a year.

What this says about the practices

Practices that were missing

• Measure time saved per task against a baseline The cut rested on the chief executive’s belief that AI meant fewer people were needed. Fiverr published no before-and-after figure for the AI projects he named, in customer support and fraud detection. Do first · Effort: low (days, one person) Evidence: Common practice

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• Company caseCompany-reported resultTemple & Webster: an online furniture retailer with about 200 staff put AI into customer care firstTemple & Webster sells furniture online with about 200 employees. It reports that AI and automation handle 80% of customer contacts in whole or in part, and that customer care now costs over 60% less as a share of revenue. It then set up central approval, training and a contact person for AI in every department.

Sources

1. Fiverr International (15 September 2025). Form 6-K: reduction in force of approximately 250 team members, with the letter to shareholders and the chief executive’s letter to staff (Exhibit 99.1). Filed with the US Securities and Exchange Commission. sec.gov
2. Fiverr International (19 February 2025). Annual report for 2024 (Form 20-F). Source of the 2024 employee count. sec.gov
3. Fiverr International (12 March 2026). Annual report for 2025 (Form 20-F). Source of the 2025 employee count, the restructuring cost and the contractor spending. sec.gov
4. Fiverr International (5 November 2025). Third-quarter 2025 results. Press release, Form 6-K. sec.gov
5. Fiverr International (18 February 2026). Fourth-quarter and full-year 2025 results. Press release, Form 6-K. sec.gov
6. Fiverr International (29 April 2026). First-quarter 2026 results. Press release, Form 6-K. sec.gov
7. Fiverr International (29 July 2026). Second-quarter 2026 results. Press release, Form 6-K. sec.gov