Talent platform Upwork Inc. (NASDAQ:UPWK) reported first-quarter revenue rose 13.8% year over year to $160.9 million, but that is slower than the 18.0% year-over-year growth in the fourth quarter and 23.8% in the third quarter. The San Francisco-based company reported unanticipated softness in certain client behavior because of macroeconomic uncertainty. This was most pronounced with the company’s enterprise customers and large businesses in its self-service marketplace.

However, the company noted it did better than expected in the quarter despite the slowdown.

“We spent the first quarter of 2023 moving swiftly to adapt to new realities as we saw the economy further impact our customers and our business,” according to a shareholder letter from President and CEO Hayden Brown and CFO Erica Gessert.

Gross services volume — the total amount clients spend on marketplace offerings and managed service offerings as well as additional fees — was flat year over year in the first quarter at approximately $1.0 billion.

Still, Upwork reported the number of active clients increased by 4% year over year to 827,000.

Enterprise revenue rose 6% to $11.4 million.

Upwork also reported it has taken steps to streamline operations, including a workforce reduction of 137 people (15% of its full-time employees), pausing second-half brand media investment, revising its hiring plans and reducing vendor-related expenses. The measures will drive more than $80 million in annualized net cost savings.

In another comment: The company reported interest in generative AI continues to climb. The number of search queries related to generative AI in the first quarter increased more than 1,000% compared to the fourth quarter of 2022. The average number of weekly job posts related to generative AI increased more than 600% over the same time period.

Upwork also reported that Chief Sales Officer Eric Gilpin is resigning, though he will remain employed by the company as sales advisor through June 30. The company is launching a search for a new general manager.

Guidance

Upwork forecast second-quarter revenue of between $161 million and $164 million, an increase of 4% at the midpoint. However, it’s reducing its full-year revenue forecast to between $655 million and $670 million, growth of 7% at the midpoint.

Share price and market cap

Shares in Upwork were down 1.47% to $8.02 as of 12:24 p.m. Eastern time; they set a new 52-week low today when they reached $6.56, according to FT.com. The company had a market cap of $1.09 billion.