Upwork Sees Growth Driven by AI Demand Amid sluggish Labor Market

The labor market remained sluggish in the third quarter but demand for freelance talent in areas related to artificial intelligence (AI) helped drive 2% year-over-year growth in gross services volume (GSV) at work marketplace Upwork.

“In terms of the macro, I’d say things have been relatively stable in the course of Q3, with no real change as Q2,” Upwork President and CEO Hayden Brown said Monday (Nov. 3) during the company’s quarterly earnings call. Brown was responding to an analyst’s question about the state of freelancer demand and any changes the company has seen.

Earlier in the call, Brown characterized the labor market as “still sluggish.”

“So, it’s crucial to emphasize that against that backdrop, our GSV growth really has been driven by initiatives that we’ve executed, the success of AI and SMB [small and medium-sized business],” Brown said.

Brown said during the call that Upwork is “a structural beneficiary in the AI era of work” and that AI category growth in its marketplace was one of the drivers of its GSV gains in the third quarter.

During the quarter, Upwork saw the number of clients engaged in AI-related projects grow 43% year over year, the GSV from those projects increased 72% year over year, and spend on AI skills as a percentage of total GSV reached 5%.