Swedish fintech company Klarna embraces AI to cut headcount by 50%

Swedish fintech giant Klarna, which pioneered buy now, pay later, recently announced plans to use AI to boost efficiency, cutting its employee headcount by nearly 50% in the process.

Klarna CEO Sebastian Siemiatkowski revealed in an interview with the Financial Times that the company is targeting a “directional” workforce of around 2,000  – a stark drop from the 5,000 employees it had at its peak. 

This reduction is already underway, with Klarna trimming its staff to 3,800 over the past year, largely through attrition rather than layoffs.

What’s the driving force behind Klarna’s leaner future? The mass rollout of AI solutions, particularly in marketing and customer service. 

By deploying AI in customer service and marketing areas, Siemiatkowski believes the company can maintain and even enhance its operations with a smaller team. 

“Not only can we do more with less, but we can do much more with less,” he told the FT.

Klarna’s AI investment comes as it prepares for an anticipated IPO. The company hopes to rebound from a challenging period that saw its valuation plummet from $46 billion in 2021 to $6.7 billion last year. 

Touting the benefits of AI – including a doubling of revenue per employee from roughly $400,000 to $700,000 – is likely to be a key aspect of Klarna’s pitch to investors.

But while Klarna sees a promising future in an AI-driven world, Siemiatkowski acknowledged the broader societal implications of the technology’s rapid advancement. 

Speaking to the BBC, he called on governments to consider alternative ways to support those displaced by AI, arguing that simply expecting new jobs to materialize is “too simplistic.”

The Klarna CEO’s comments reflect a growing concern about the potential for AI to upend the job market on a massive scale. 

A recent report from the Institute for Public Policy Research warned that under a “worst-case scenario,” up to 8 million jobs in the UK alone could be lost due to AI automation. 

The report emphasized the need for proactive policies to manage this transition and ensure an equitable distribution of AI’s economic benefits.

Klarna is not alone in its AI-fueled quest for efficiency. Language learning app Duolingo recently made headlines for laying off human translators in favor of AI alternatives, sparking criticism on social media.

Other reports have placed customer service agents as some of the most at-risk of AI job replacements. 

As more companies integrate AI into their operations, the challenge will be to strike a balance between harnessing the technology’s potential and mitigating its disruptive impact on workers.

For Klarna, the path forward is clear: harness AI, streamline operations, and position itself as a leaner, more agile player in fintech. 

As Siemiatkowski put it, “I’m very happy about seeing that this is paying off.” 

The question that remains is how society as a whole will adapt to the AI work revolution that Klarna and others are eagerly ushering in.

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