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

Klarna CEO Sebastian Siemiatkowski is so optimistic about AI that the Swedish buy-now-pay-later (BNPL) platform plans to cut back its workforce by 50 p.c over the following few years.

In dialog with the Monetary OccasionsSiemiatkowski stated Klarna hopes to cut back its workforce from 3,800 to 2,000 staff. The present headcount has already been diminished from 5,000 after Klarna carried out mass layoffs final yr. With nearly half of the workforce on the firm, Siemiatkowski plans to shift customer support and advertising and marketing duties to AI. “Not solely can we do extra with much less, however we are able to do much more with much less,” he advised the FT.

None of this comes out of the blue. Siemiatkowski has been vocal about the price financial savings AI can deliver. Klarna imposed a hiring freeze final December, with the final word objective of “downsizing” the corporate and changing sure duties with AI. In a archived publish on X, which has since been deleted, Siemiatkowski obtained Sport to brag in regards to the $500,000 in thousands and thousands in financial savings the corporate achieved by automating duties like AI picture era, implementing an AI assistant, and attaining greater objectives with half of its advertising and marketing workforce.

Within the quick time period, Klarna’s method seems to be paying off. As reported in its second-quarter earnings name on Tuesday, the BNPL firm considerably diminished its web losses from $84 million to $980,000 (transformed from Swedish Krona to U.S. {dollars}). However massive bets on AI automation are a chance that will not repay. Financial consultants in a Goldman Sachs report report see “restricted U.S. financial advantages from AI,” and if historical past teaches us something, automating sure providers like self-checkout kiosks and customer support backfire And create new issues.

Klarna is not the one tech firm that has diminished its workforce in favor of investing in AI. In January, Duolingo laid off 10 p.c of its contractors, attributing the layoffs to AI. Meta and Google have additionally laid off staff as they make investments extra closely in AI.