Investing.com -- Upwork Inc. saw its shares surge more than 25% on Wednesday following the announcement of significant organizational changes and preliminary third-quarter 2024 results that exceeded expectations.
The company, known for connecting businesses with freelance talent, revealed a restructuring plan aimed at streamlining operations, accelerating decision-making, and driving profitability.
"We are making ourselves a more streamlined and efficient organization," said Upwork (NASDAQ:UPWK) CEO Hayden Brown, adding that the focus is on "durable, profitable growth" and delivering value for both customers and shareholders.
As part of these changes, Upwork will cut 21% of its workforce, resulting in approximately $60 million in annual cost savings.
The company also plans to flatten team structures, leverage more automation, and optimize research and development spending toward high-potential product investments.
Additionally, Upwork is sharpening its Enterprise strategy to align services with client needs more efficiently. Ernesto Lamaina, a veteran in staffing and enterprise products, has been named the new general manager of Enterprise to oversee these initiatives.
Upwork's early Q3 numbers exceeded the company's original guidance, boosting investor sentiment.
The company reported preliminary revenue of $194 million, surpassing its earlier forecast of $179 million to $184 million. Adjusted EBITDA also came in strong at $43 million, above the guidance range of $36 million to $39 million.
The company emphasized the progress made toward profitability, noting its adjusted EBITDA margin has grown from 1% in Q4 2022 to 22% in Q3 2024.
CFO Erica Gessert remarked, "These results demonstrate our commitment to execution on both top and bottom lines, driven by disciplined cost management and continuous improvement in operational efficiency."