The Impact of the Freelance Merger on the Industry

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A couple of weeks ago, the two mega freelancing companies announced a merger. Over the past ten years or so, these two companies were each other’s biggest competitors in the industry, and now both of them have planned to combine their resources and their profits. And the reason the CEO of the merged company gave behind the move: Deploying a platform that will be able to create better and faster links between jobs and skilled individuals. Sounds good for both the contractors and the freelancers; hopefully it really is this way because the market is still under a lot of speculation.

Initially, the two companies will still operate separately, but let us take a look at the combined stats. With the deal being finally closed, the merged company is serving over 2 million businesses which outsource their jobs to nearly 8 million freelancers with almost 180 countries globally involved. The unification of resources globally is capable of paving profits worth billions of dollars. So yes maybe, the merger is a great decision, at least for the two biggest freelancing businesses.

How does the merger affect the freelancing industry? Currently, this sector is enjoying an upsurge that is probably going to rise higher and higher. In recent times, the recorded unemployment rate is nearly the same and over 90 million people have left their jobs. Obviously, all these people still need a source of income which is served by the freelancing industry. These people do various freelancing jobs, and through them generate their earnings. Since freelancers are increasing, efforts are also being made to protect their rights.

In terms of revenue models, two different types can be noted in the freelance industry: the transaction fee marketplaces and the flat rate.  One of the merged companies is of the former type, charging 10% of the amounts that outsourcers pay. This rate is already high and the combined company can earn even higher amounts while reporting nearly 97% gross margins.

Another effect that will be noticeable in the industry is an increased availability of jobs. This will probably encourage more qualified freelancers to sign up, and the employers’ surety of a better job being done will increase. Hopefully, the overall impact on the industry will mark an improvement.


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