Overview of What the jobs report isn’t telling you about AI & the workforce, with Upwork’s Hayden Brown
This episode of Rapid Response features Upwork CEO Hayden Brown discussing what’s really happening in the labor market beneath the headline jobs numbers, how AI is reshaping hiring and work structure, and why the future of work is increasingly hybrid, fractional, and human-in-the-loop. Brown argues that AI is not simply eliminating jobs; it’s also creating new roles, increasing demand for AI-fluent talent, and accelerating the shift toward freelance and contingent work.
Key takeaways
- The labor market is slow and subdued overall, especially for small businesses, but there are bright spots in AI-related work.
- Upwork sees a major shift toward fractional/freelance work as businesses seek flexibility and lower fixed labor costs.
- Brown says AI is changing expectations, but mass job destruction is not the most likely outcome; instead, jobs are being reshaped, split, and recombined.
- Companies are increasingly finding that AI alone often fails to complete tasks end-to-end, and human expertise is still essential.
- Upwork is building for a future where agents and humans coexist, with systems for authentication, oversight, and real-time human support.
- Freelancers with AI skills are earning significantly more and are often adopting new tools faster than full-time employees.
What Upwork is seeing in the market
Labor market trends
- The broader jobs market remains sluggish, and small businesses are especially cautious.
- Employers are pulling back hiring across channels, but the demand is not disappearing—it’s moving into different forms of work.
AI demand is concentrated and growing
- Upwork says its AI category grew more than 22% year over year.
- Businesses are actively seeking workers who know how to use AI tools and navigate AI-enabled workflows.
- Brown describes AI as one of the few areas where both budget and energy are still flowing.
Freelance work is expanding
- Upwork’s survey showed a 10-point increase in U.S. knowledge workers freelancing, rising to 38% from 28% a year earlier.
- Brown frames this as both:
- a choice for workers seeking flexibility and control, and
- a necessity as companies shift risk and reduce full-time headcount.
AI, jobs, and the future of work
Not just job loss, but job redesign
- Brown emphasizes that technology historically destroys and creates jobs at the same time.
- Her view: AI is a bigger, faster version of that cycle—not pure replacement.
- She rejects the idea that the future is simply “humans vs. machines.”
Human-in-the-loop still matters
- Upwork found that when clients try to use AI agents on their own, failure rates are high, even for simple tasks.
- Adding a human expert increases success rates by more than 70%.
- The company says 23% of clients have already moved work back from AI to humans or are about to.
AI is changing how work gets assigned
- Upwork has seen AI agents posting job ads and attempting to hire humans.
- The platform now supports agent access through authentication so it can identify good actors and bad actors.
- Brown says this is part of a broader shift where work now originates inside tools like ChatGPT and Claude.
Upwork’s strategy in the AI era
Building for AI platforms, not resisting them
- Upwork is designing for a world where work begins inside third-party AI tools.
- Brown views those tools as new “destinations” and “origination points” for work.
- The company is trying to ensure it can operate in that ecosystem without it becoming the “wild, wild west.”
Open models and cost efficiency
- Upwork tests a variety of AI models, including open-source models.
- Brown says there are cases where open-source systems can deliver 10x savings or more.
- The company uses a gateway approach to choose models based on performance, cost, safety, and use case.
Upwork’s own AI tools
- Upwork uses an internal AI system called Crystal Ball, which lets Brown query company data in natural language.
- Upwork also has an agent called Uma that helps with job descriptions and interview prep.
Freelancers, AI skills, and wages
- Brown says freelancers are moving faster into AI because it directly affects their income.
- Freelancers with AI skills earn 34% more per hour than those without them.
- She highlights the rise of a new generalist role: the “AI orchestrator”—someone who can coordinate AI tools effectively without being narrowly specialized.
- Gen Z is especially active in freelancing, with 42% freelancing, according to the discussion.
Leadership lessons from a fast-changing environment
Shorter planning horizons
- Brown says a one-year roadmap is now too long to rely on in a rapidly changing environment.
- Upwork still sets ambitious long-term goals, but it is far less committed to fixed step-by-step execution plans.
Staying focused internally
- She stresses the importance of removing organizational noise and keeping priorities tight.
- The company uses:
- ranked priority lists
- portfolio thinking across speculative vs. near-term bets
- constant reassessment as market conditions change
Honest communication
- Brown explained Upwork’s layoffs earlier in the year as a response to changing conditions and profitability goals, not as a simple “AI replaced humans” story.
- Her emphasis was on being transparent and authentic about what was actually driving the decision.
Final message
Brown’s core argument is that the future of work should not be framed as a winner-take-all battle between people and machines. Instead, the goal should be a system where AI amplifies human capability, businesses get more flexible access to talent, and workers can build meaningful careers in a more dynamic economy. Upwork’s data suggests that the most durable advantage in the AI era is still verified human expertise.