Upwork cuts 2026 revenue forecast as AI reshapes freelance demand, with fewer clients but larger projects.

Upwork reported a 4% drop in active clients and a 2% revenue decline in Q2 2026, reflecting faster-than-expected automation of low-complexity freelance jobs by AI. Despite this, spending per client rose 5% to a record $5,230, with average contract hours hitting 100, indicating clients are opting for larger, more complex projects. AI-related work grew over 22%, especially in AI consulting, as businesses seek talent to apply AI effectively rather than just access it. Upwork lowered its full-year revenue outlook to $730-$750 million due to ongoing AI automation and labor market challenges, signaling a cautious near-term outlook despite growth in AI and enterprise segments.