TLDR: Recent layoffs at Fiverr, impacting 250 employees, are highlighted as an early indicator of a significant shift in the white-collar job market due to artificial intelligence. The article from CTech, published on September 28, 2025, details how AI is increasingly replacing human service providers in knowledge-intensive professions, from call centers to consulting firms, creating a new ‘Service as Software’ industry valued at $4 trillion. Israeli entrepreneurs are particularly active in this emerging sector, though challenges like client perception and business model adaptation remain.
The recent announcement by Israeli company Fiverr, detailing the layoff of 250 employees—approximately a quarter of its workforce—serves as a stark illustration of artificial intelligence’s accelerating impact on white-collar professions. This move, reported by CTech on September 28, 2025, follows a notable decline in activity on Fiverr’s platform, as tasks such as translation, design, and programming are increasingly being handled by AI agents.
Lotan Levkowitz, a partner at Grove Ventures, asserts that ‘The layoffs at Fiverr are just the beginning.’ He emphasizes a fundamental transition from traditional service companies, where individuals sell their hours, to software-driven solutions. This shift is poised to disrupt even the most prestigious professions, extending from low-cost call centers in the Philippines to the high-stakes consulting industry in New York and London.
Just three years after the launch of ChatGPT, it has become evident that AI is capable of, and will continue to, replace human service providers in knowledge-intensive roles. This transformation is not merely a warning about job displacement; it represents a monumental entrepreneurial opportunity within the $4 trillion service market, fostering the rise of ‘Service as Software.’
Consulting giants are already embracing this change. The Wall Street Journal reported last month that McKinsey has deployed 12,000 AI agents for tax and auditing processes, a move some partners describe as an ‘existential threat’ to traditional business models. McKinsey’s internal AI search system, Lilli, is now used daily by 70% of its employees. Competitors are following suit: EY has committed $1.4 billion over five years to AI, launching a tax management platform, while Deloitte is integrating Microsoft’s Copilot into its consulting practice, and KPMG utilizes Clara AI for audits and other decision-making tools.
This integration of AI is flattening organizational structures within consulting. Instead of hierarchical teams performing research and analysis, AI handles data collection, simulations, and comparisons, allowing senior experts to work directly with software. A Harvard Business Review article highlights that firms combining consulting, product development, and AI are exploring new business models, favoring subscriptions and software-based services over one-off projects.
Levkowitz explains, ‘We’ve had two decades where everything has become SaaS. Yet consulting remained one of the last multi-trillion-dollar industries untouched by software, because every client required unique solutions. But generative AI now enables personalization at scale. Suddenly, customers can choose from a menu of options and, instead of paying consultants by the hour, receive a software-driven solution.’ This paradigm shift affects the entire service spectrum, from affordable freelance gigs to high-end consulting.
This transformation presents a significant opportunity for startups, particularly for Israeli entrepreneurs, who Levkowitz believes are well-positioned to lead in the ‘Service as Software’ domain. In the last two years alone, 40 Israeli companies in this sector have collectively raised over $1.5 billion, with some already achieving substantial revenues. Examples include ActiveFence, which uses AI to moderate harmful content, and Wonderful, which automates Hebrew-speaking call centers. REAL has developed an AI-driven platform for corporate real estate management.
Grove Ventures categorizes the ‘Service as Software’ landscape into seven key areas: Financial Operations, Customer Service, IT and Security, Compliance and Risk Management, Workforce Management, Go-to-Market, and Business Operations. Notable Israeli companies already excelling in these areas include Tipalti (Fintech), HiBob and Papaya Global (HR), and Gong (Go-to-Market).
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However, challenges persist. Branding is a hurdle, as established relationships with traditional consulting firms create psychological barriers for clients. The business model also poses difficulties, as clients accustomed to hourly billing may resist recurring SaaS subscriptions. Furthermore, organizational structures must evolve to support personalized AI solutions, potentially requiring new hybrid roles like Palantir’s ‘Forward Deployed Engineers.’ Lastly, the absence of human consultants’ personal touch, reassurance, and training means clients need gradual guidance into this new software-driven service world. Despite these obstacles, once embedded, ‘Service as Software’ companies can become indispensable infrastructure, embedding institutional knowledge within their systems and creating immense dependency.
