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Almost half of the employees currently working at the “buy now, pay later” startup Klarna could be replaced by AI in the next few years.
Klarna CEO Sebastian Siemiatkowski told the Financial Times last week that the company plans to cut its workforce by almost half over the next few years, from 3,800 to 2,000 employees. Instead of making layoffs, the company will continue its hiring freeze that began in September and will not hire replacements for employees who leave the company.
“By simply not hiring new employees, which we haven't done since September, the company is somehow getting smaller and smaller,” Siemiatkowski explained, pointing out that average revenue per Klarna employee increased by 73% compared to the previous year.
AI will assist the remaining employees in carrying out their tasks, said Siemiatkowski.
Related: There are new rules for buy now, pay later programs – here's what you should know
“Not only can we do more with less, we can do much more with less,” he told the Financial Times.
A year ago, Klarna employed 5,000 people, but due to employee departures and the hiring freeze due to AI, the company has shrunk to its current size.
Sebastian Siemiatkowski. Photo by David M. Benett/Dave Benett/Getty Images for Klarna
Klarna claimed in February that its AI assistant did the same work as 700 full-time customer service agents. The AI assistant reduced the length of customer queries to two minutes, whereas previously a conversation with a human agent took an average of 11 minutes.
Related: Klarna says its AI assistant does the work of 700 people. The company laid off the same number of employees 2 years ago.
Siemiatkowski wrote in a now-deleted post on X in May that Klarna's internal marketing team was half the size it was last year, but was using AI to do more and spend $6 million less.
Klarna's second quarter 2024 earnings report showed its third consecutive quarter of growth in the U.S., with revenue and operating profit increasing 17% and 21% year-over-year, respectively.
Klarna is reportedly considering an IPO in the US with a valuation of $20 billion.
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