Klarna Bets Big on AI: Workforce Shrinks as Automation Expands

Klarna, the “buy now, pay later” fintech leader, has paused human hiring and shifted operations to artificial intelligence (AI), replacing roles previously filled by hundreds of employees. The company ceased hiring over a year ago, opting to expand AI deployment across its operations, according to CEO Sebastian Siemiatkowski.

Over the past year, Klarna’s workforce has shrunk by 22% due to attrition, leaving the company with around 3,500 employees compared to 4,500 previously. This downsizing aligns with Klarna’s growing reliance on AI, which Siemiatkowski stated has efficiently taken over many tasks formerly handled by human workers. Among the notable AI implementations is an OpenAI-powered assistant, which has replaced 700 customer service agents.

Siemiatkowski emphasized that the efficiency gains from AI would benefit existing employees, with plans to accelerate salary increases as a way to share the productivity improvements. He also connected the shift to AI with Klarna’s strategic goals, including plans to expand its presence in the US and pursue an initial public offering (IPO). Klarna has reportedly submitted a confidential draft registration statement for the IPO. Siemiatkowski added that Klarna, already operating as a bank in Europe, aims to secure a banking license in the US, taking advantage of former President Donald Trump’s offer of expedited licenses for companies willing to invest $1 billion.

The adoption of AI as a cornerstone of Klarna’s operations has fueled debate about the implications for human employment. McKinsey & Company has projected that advancements in AI could displace millions of jobs by 2030. At Klarna, while most roles are being replaced by AI, hiring for essential positions, particularly in engineering, continues.

This trend is not unique to Klarna. IBM’s CEO Arvind Krishna has similarly predicted that up to 30% of HR roles at the company could be replaced by AI within five years. Krishna has also mandated that managers must relocate near offices or exit the company, reflecting another layer of operational restructuring alongside AI integration.

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