Klarna’s CEO Unveils Strategy to Cut Workforce by 50% and Implement AI Solutions

Klarna’s CEO, Sebastian Siemiatkowski, is making bold moves in the artificial intelligence (AI) sector, announcing plans to reduce the workforce of the Swedish buy-now-pay-later (BNPL) platform by 50 percent in the next few years.

In recent statements, Siemiatkowski revealed that Klarna aims to decrease its employee count from 3,800 to 2,000. This decision follows previous layoffs that reduced the workforce from 5,000. With this significant downsizing, Siemiatkowski is pivoting customer service and marketing tasks towards AI technologies, emphasizing that the company can achieve much more with fewer resources.

This strategy is not unexpected, as Siemiatkowski has previously highlighted the cost-efficiency of AI. Klarna froze hiring last December with the goal of streamlining operations and reallocating tasks to AI systems. Although he faced criticism for discussing the millions saved through automation, including virtual assistants and AI marketing tools, the transition appears to be part of a broader strategy to enhance operational efficiency.

In the short term, Klarna’s strategy seems to be yielding positive results. Recent Q2 earnings reports indicate the company has significantly reduced its net losses from $84 million to $980,000. However, the heavy investment in AI automation carries inherent risks, as economic experts have voiced concerns over the limited economic benefits of AI in the US. Historical trends show that automation can sometimes lead to unforeseen complications, such as issues stemming from self-service technologies and customer support disruptions.

Klarna is not alone in this trend; several tech companies are reshaping their workforce in favor of AI investments. Earlier this year, Duolingo eliminated 10 percent of its contractors, attributing this move to advancements in AI, while other giants like Meta and Google have also reduced their workforce as they deepen their commitment to AI development.