Upwork's Financial Results and Forecasts for 2023

[#1]

I just attended Upwork's Stockholders annual meeting for 2022 and their forecasts for 2023.

It was a very interesting meeting and below are my takeaways from the meeting in no specific order. Feel free to ask any questions.

- In 2023 40,000 Clients have signed up for longer term hiring on Upwork and 2,000,000 Freelancers.

- Upwork lost $89.9 million dollars in 2022 with a possibility of becoming profitable in the second half of 2023.

- The current focus is to generate more revenue from existing clients versus adding new clients in the first half of the year.

- Clients are taking longer to make purchasing decisions due to the macroeconomic conditions.

- Marketing spend will drop 12% in 2023.

- Companies are in Phase 1 of 3 phases of economics. In English - companies are scaling back and are cautious.

- Upwork is very excited about AI and stated that during the past 4 months AI posts are up 39 x!

- Upwork stated clients are purchasing from freelancers that produce their work using AI because it reduces client costs.

- Indirectly stated skilled freelancers are in more demand and less skilled in less demand.

- Upwork sees the first half of 2023 as challenging and the second half to be better based upon their enterprise sales team.

My takeaway is that freelancers need to be incorporating AI and expert level Skills or risk being less in demand. Expect the first half of this year to be slower due to the economy. AI and the economy have taken the show for the next six months.

This is a recently written Post with the SECRETS to growing your Upwork Sales at:

https://community.upwork.com/t5/Coffee-Break/THE-Secrets-to-Growing-Your-Upwork-Sales/m-p/1229943#M5...

This is a recently written Post with the SECRETS to hiring freelancers on Upwork at:

https://community.upwork.com/t5/Clients/SECRETS-to-Growing-Your-Business-On-Upwork/m-p/1235553#M8984...

[#2]

Peter,

Again you restated my comments. Never said this is great - stated it as a fact. 😁

[#3]

Sorry, but don't understand why would freelancers then invest their time into learning all things AI, if the demand will decrease to 1/10 in 10 years? Wouldn't be rather more rational to freelance with the skillset they have as long as they can, while investing time and what they can earn into something that will - first, provide them "food on the table" and second, make them less reliant on the demand for workers, more independent economically? Instead of fighting and competing in a fight where AI takes all in the end.... Idk, it seems more logical and waaay more time efficient to invest into self-suficiency than to invest into learning AI.

[#4]

So what exactly is your suggestion? I mean, how to invest in yourself and how to turn that into making money?

[#5]

The best advice I can forge would be - use the time while you are making profits doing freelancing to invest into the means that will provide you and your family with necesarry products and existential minimum of off-grid termal/electric energy, once you are not able to make profits of freelancing anymore. That point will inevitably come sooner rather than later and when it comes, it wont matter much how much money do you have - the main problem will be lack of products and energy, since the recession will hit everyone. By providing yourself enough capital and know-how to produce enough for yourself, you will be able to "bring food on the table" which is the main reason why anybody is working in the first place. It is the first incentive when it comes to working, everything after that is building upon that foundation. If that many white and blue collar jobs will disappear, I really struggle to see any other outcome than really hard recession, shortages of basic goods and services, followed by social unrests and who knows what after that. 

By inability to acquire any income, one should focus on finding the means to satisfy basic needs WHILE one has opportunity to do so - once is over, it is over, if you didn't think about it, it will force you to react without thinking, which will most likely lead you to next mistake.

Do not take my advice literally, but what I would do is to rethink my position. If I am in the city, I would think about moving to country side, learning to grow basic goods and would definately buy some power generator, learn about it, how it works, how I can make it generate more power, stuff like that, so I can always have food, water and enough energy for appliances. All the AI hype is just to high to not take its full potential and that will lead to AI taking all the work eventually. Even if it is 90% as William suggested, or even "just" 80% or 70%, this will cause major economic hit without doubt and more importantly, it is more realistic to think that I wont be among those will "survive" - eventually, AI will take all anyways, year or five later, no big difference.

[#6]

William offered the 90/100 as a pure hypothetical. He did not suggest that 90% of the workforce will lose their jobs to AI specialists. Will there be a lot? Yes. 90%? Not likely.

[#7]

Jonathan,

It's too funny how some of the threads we are both posting in how we both get it. Must be a Texan thing. 😁

[#8]

Eventually, it will come to a choice do people want to have AI or they want to have economy. 

[#9]

I think you give deep-learning algorithms too much credit. They can't do anything in the physical world, except function as data analyzers for sensory/feedback equipment.

[#10]

In physical world you also have incentives and production is already close to non-existing in western economies, in other words west is importing already, dependant on imports. Luxury goods are in causal-consequential relation with white collar jobs, which are directly affected by AI - no white collars no luxury goods sales.  

[#11]

Bruh, I work in manufacturing. Your claim that "production is already close to non-existing in western economies" is ludicrous. **Edited for Community Guidelines**.

[#12]

You are working in a very specialized type of manufacturing, we'll see the impact on demand once white collar jobs start disappearing.

[#13]

Or sit on their A__ and watch reality show re-runs and coverage of Blah_Blah Rallys with a 6 pack!

[#14]

I enjoyed your conversation, your points of view are interesting.

I have my own opinion, I consider artificial intelligence and automation something absolutely necessary.

Without it our development and advancement as a civilization would be terribly stuck, it is totally true that this will generate collateral damage but if we want to continue advancing there is no other way out.

on the other hand anyone who does not want to keep up with the pace of technological progress as you rightly said can isolate themselves in the countryside, hunt and grow their own food or reduce their expenses with the use of cheaper energy, home hydroponics etc ...

The human capacity should be totally destined to creative, strategic and investigative tasks, we are nothing in the universe and we still know almost nothing about it, but I hope that this will allow us to answer someday so many questions, we have never stopped technological advances for those who do not contribute anything, we must seek solutions not problems.

We are very ambitious but that ambition is what has brought us to this point.

[#15]

When I graduated from high school, Key Punch Operators were the most sought-after skill set.  Life is change, and all of us will do what we have to do to keep up with it.

[#16]

Thanks for the heads up

[#17]

Mario,

You are most welcome!

[#18]

Thanks, William!

This summarizes what I was inquiring about. 

Thanks again!

[#19]

Gustavo,

You are most welcome! If you have any questions, let me know. Have an amazing day!

[#20]

Thanks for sharing William. 

The message to me was: Start thinking about how you can use AI to increase your productivity as a freelancer, in my case as a finance writer. I've experimented with it and surprised how well it can create a first draft. There is no way (where AI is today) it could replace my work, but -- as they say -- it is always a lot easier to improve somebody else's work! In this case, maybe, AI could at least help us get some structure, basic facts, and an outline on a page, which we can then polish. Perhaps that only saves us 20% of our time on the project. But perhaps it is more, and perhaps it will grow. 

Put differently, I think our value remains: We can tell when AI is good and bad. So, use the good and fix the bad. 

Thanks again, 

Alex

[#21]

Alex,

Learning to use AI to improve productivity and quality. That's the point. This needs to start now and fast, before other writers do so. So the early starters will always be ahead.

[#22]

Alex,

You are most welcome!

Around 100,000 writers are using Jasper which is the writers AI tool.

Within 15 minutes I wrote a business plan including three years of financials just for the fun of it for a start up business idea. When I was in college, I created a similar scaled down tool for the Small Business Development Center, however it would still require several hours of work with the proper input. These new generative industry specific AI tools are already changing the landscape of business.

[#23]

🤣You made my day, Utku! All due respect to your expertise, but you marketing/financial guys are understanding only the part of consumer side of AI, without realizing its full potential. It is like having a race around the world against light particle 🤣 Or trying to catch the light with lasso in try to subdue it to your control and stop it from winning the race 🤣

[#24]

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“…we currently have a significant surplus of talent in relation to the number of clients actively engaging talent for most categories of services on our work marketplace. As a result of this surplus, we primarily focus our efforts on retaining client spend and acquiring new clients, as opposed to acquiring new talent and retaining existing talent."

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This is also from report 2022 and it demonstrates what they intend to do and are doing, so you can put effort but it is going to be futile.

[#25]

The funniest thing of all is that this started as freelance platform, a place that gathered creative and capable people who wanted to escape corporate life and corporate jobs, but what it became is an uneficient corporation with tons of rules that needs slavelancers, not freelancers, while operating in almost command market conditions. Upwork not only became its antipode, but became politically oriented, which is always bad for business.

[#26]

New Updates:

Many of the clients are receiving 50+ proposals within 24 hours regardless if Boosted or not in 2023. Only about 50% jobs posted will result in a hiring. All else being equal that is only a 1% chance of the average freelancer getting hired. Of course Top Rated freelancers have a better chance, however the point being made is things are very competitive this year.

During any given quarter on Upwork there are 4,000,000 active freelancers and 800,000 active clients. Therefore all else being equal, the average freelancer has a 20% chance of getting hired ONCE per quarter.

Basically Freelancer Supply > Client Demand

In the past 3 months, I have been hired for around 40+ projects, however I have adjusted my Strategy to match the changes on Upwork's algorithm, the weak macro economy and the AI revolution.