GLOBAL - Upwork, a global gig work platform, has announced a 21 per cent reduction in its workforce as part of its cost-cutting and restructuring efforts.

In announcing its Q3 2024 results, the company stated that these layoffs are expected to generate approximately $60 million in annual savings. According to the official statement, Upwork exceeded revenue expectations and achieved a 22 per cent adjusted EBITDA margin, as part of its goal to reach 35 per cent over the next five years.

Hayden Brown, Upwork’s Chief Executive Officer, said, "We are focused on sustainable, profitable growth and delivering more value to our customers and shareholders. These changes will enhance decision-making, reduce costs, and drive innovation, allowing us to continue outperforming our industry peers," 

"We are confident that these actions will accelerate our progress toward profitability, enhance our competitive edge in the hiring and staffing industry, and strengthen our ability to thrive in a dynamic macro environment,” Brown added. 

In addition to the layoffs, Upwork plans to flatten its organisational structure, increase automation, and optimise investments in research and development. The company remains committed to expanding its Enterprise services, which are central to its growth strategy.

Erica Gessert, Upwork’s Chief Financial Officer, remarked, “These results showcase our commitment to executing on both top and bottom lines, driven by disciplined cost management and continuous improvement in operational efficiency. We remain relentlessly focused on implementing our strategic plan, growing our highly profitable business, and enhancing shareholder value.”

The talent platform currently employs over 800 global workers, down from 850 in 2022. Despite the workforce reduction, Upwork asserts that these changes are necessary to remain competitive and meet profitability targets.

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In September, Engine Capital, one of its investors, questioned Upwork's management and strategy, stating that the talent platform is not living up to its potential. In an open letter, Engine Capital cited Upwork’s lack of strategic clarity and focus, ineffective execution, poor capital allocation, and a revolving management team under CEO Hayden Brown. The letter also questioned whether the board is adequately holding senior management accountable for its numerous missteps. 

In response, Upwork stated, "As we execute our strategic priorities and growth and profitability goals, we look forward to continuing our engagement with all of our shareholders."