Klarna CEO reveals plan to cut back workforce by 50% and exchange it with AI

Klarna CEO Sebastian Siemiatkowski is so bullish on AI that the Swedish buy-now-pay-later (BNPL) platform plans to chop it is workforce by 50 % within the subsequent few years.

Chatting with the Monetary Instances, Siemiatkowski mentioned that Klarna is hoping to scale its workforce down from 3,800 to 2,000 staff. The present worker depend was already decreased from 5,000 after Klarna carried out mass layoffs final 12 months. With nearly half the workforce on the firm, Siemiatkowski plans to shift customer support and advertising duties to AI. “Not solely can we do extra with much less, however we will do rather more with much less,” he mentioned to the FT.

None of that is popping out of the blue. Siemiatkowski has been vocal concerning the cost-saving advantages of AI. Klarna carried out a hiring freeze final December, with the end-goal of “shrinking” the corporate and changing sure duties with AI. In an archived publish on X that has since been deleted, Siemiatkowski obtained backlash for boasting concerning the hundreds of thousands of {dollars} saved by automating duties like AI picture era, implementing an AI assistant, and doing extra with half the scale of its advertising staff.

Within the quick time period, Klarna’s strategy appears to be paying off. As reported in its Tuesday Q2 earnings name, the BNPL firm has significantly narrowed its web losses from $84 million to $980,000 when transformed from Swedish Krona to US {dollars}. However betting huge on AI automation is a raffle that may not pan out. Financial specialists in a Goldman Sachs report see “restricted US financial upside from AI,” and if historical past tells us something, automation of sure providers like self-checkout kiosks and customer support can backfire and create new issues.

Klarna is not the one tech firm to chop its workforce in favor of investing in AI. In January Duolingo lower 10 % of its contractors, and attributed the redundancy of employees to AI. Meta and Google have additionally laid off staff as they make investments deeper in AI.