Klarna's AI Gambit: From Efficiency Boost to Financial Setback

Klarna used an AI avatar of its CEO to deliver earnings, it said | TechCrunch

Sebastian Siemiatkowski is leaning all the way into the idea that his buy-now-pay-later, IPO-bound startup Klarna is an AI company. When Klarna delivered updated quarterly earnings on Monday, it was his AI avatar (pictured above) that presented the highlights, according to the company's YouTube video. Other than AI Siemiatkowski's admission, it wasn't obvious that this was AI. There were only a few subtle signs: AI Siemiatkowski didn't blink as much as most humans do. The voice sync was good, but not perfect. The AI was also wearing a brown jacket that looked a lot like the one from a widely circulated corporate photo of his human self (though the shirt was different). Klarna, which is getting ready to debut as a public company, was using the updated financials to tout AI as a driving factor for hitting 100 million users. It credited its use of AI for a fourth consecutive profitable quarter, explaining that it "streamlined its workforce by ~40%," the company said in its blog post, driving up revenue per employee to nearly $1 million. Human Siemiatkowski specified to CNBC that "the company has shrunk from about 5,000 to now almost 3,000 employees." He's not the first CEO to poke fun at the idea of an AI replacing a CEO. AI sales agent startup Artisan, known for its viral "stop hiring humans" ad campaign, posted an April Fool's video of its CEO Jaspar Carmichael-Jack being fired and replaced with an AI CEO. But maybe the idea of AIs replacing CEOs isn't a total joke. While it's certainly true that some CEOs -- especially at startups -- do get their hands dirty coding features or cold calling prospects, a CEO's main jobs are to set strategy, make decisions, and take responsibility for those decisions. Who better than an AI built on a SATA reasoning model to digest large swatches of company data, study gobs of successful business strategy, and use that to make decisions? In fact, research published in Harvard Business Review last year found that an AI could, mostly, outperform human CEOs, based on a model using GPT-4o. However, the AI CEO also quickly got fired by the study's virtual board. This is because it did poorly responding to "black swan events, such as market collapses during the COVID-19 pandemic," the researchers found. Still, as AI advocates like to point out, these are early days. Future AI CEOs may learn to excel at that, too. Klarna did not immediately respond to a request for further comment.

Klarna's revenue per employee soars to nearly $1 million thanks to AI efficiency push

Last year, Klarna announced a significant initiative to leverage its internally developed AI systems, powered by OpenAI, across its operations. This wasn't empty talk for the buy now, pay later giant. The company not only ended its pricey contract with Salesforce CRM, but also curtailed its hiring efforts, allowing AI to do some of the work previously performed by humans. Klarna announced Monday its reliance on AI is driving significant efficiency for the company, and it's on track to reach $1 million in revenue per employee, up from $575,000 per worker a year prior, according to the company's latest financials. While the company claims most functions became more efficient thanks to its AI efforts, the largest financial impact was the significant reduction in customer service costs. Klarna said last year it planned to replace nearly 700 full-time customer service contractors with AI chatbots. However, last week, the company said customers would again have the option to speak with a human agent. In March, the Swedish company filed paperwork for its highly anticipated U.S. IPO. Klarna postponed those plans last month due to the volatility in the stock market triggered by President Trump's tariff announcement. Despite a 13% revenue increase to $701 million in Q1 2025, the company provided no timeline for resuming its IPO plans.

Klarna's revenue per employee soars to nearly $1M thanks to AI efficiency push | TechCrunch

Last year, Klarna announced a significant initiative to leverage its internally developed AI systems, powered by OpenAI, across its operations. This wasn't empty talk for the buy now, pay later giant. The company not only ended its pricey contract with Salesforce CRM, but also curtailed its hiring efforts, allowing AI to do some of the work previously performed by humans. Klarna announced Monday its reliance on AI is driving significant efficiency for the company, and it's on track to reach $1 million in revenue per employee, up from $575,000 per worker a year prior, according to the company's latest financials. While the company claims most functions became more efficient thanks to its AI efforts, the largest financial impact was the significant reduction in customer service costs. Klarna said last year it planned to replace nearly 700 full-time customer service contractors with AI chatbots. However, last week, the company said customers would again have the option to speak with a human agent. In March, the Swedish company filed paperwork for its highly anticipated U.S. IPO. Klarna postponed those plans last month due to the volatility in the stock market triggered by President Trump's tariff announcement. Despite a 13% revenue increase to $701 million in Q1 2025, the company provided no timeline for resuming its IPO plans.

Klarna CEO says AI helped company shrink workforce by 40%

Pedestrians walk by an advertisement for Klarna.Daniel Harvey Gonzalez | In Pictures via Getty Images Klarna CEO Sebastian Siemiatkowski said the company has managed to shrink its headcount by about 40%, in part due to investments in artificial intelligence and natural attrition in its workforce. "The truth is, the company has shrunk from about 5,000 to now almost 3,000 employees," Siemiatkowski told CNBC's "Power Lunch" on Wednesday. "If you go to LinkedIn and look at the jobs, you'll see how we're shrinking." The Swedish fintech provider has been outspoken about its aggressive adoption of AI tools across the company, while touting the productivity gains that have come along as a result. The company deployed an "AI-generated version" of Siemiatkowski to announce its third-quarter results last year to demonstrate that AI could automate many jobs. Klarna partnered with ChatGPT maker OpenAI in 2023 and launched an AI customer service assistant using its technology a year later. The company said last year that AI was doing the work of 700 customer service agents. Klarna's headcount fell from 5,527 full-time employees as of the end of December 2022 to 3,422 staffers last December, according to the company's IPO prospectus filed in March. The company attributed the reduction to its efforts to leverage AI and lower its overall headcount, adding that it expects headcount to continue to fall over time. Siemiatkowski said the headcount reduction wasn't solely due to AI, but also because of attrition. "We have simply communicated to our employees that what we're going to do is we're gonna shrink, so we're going to stop hiring," Siemiatkowski said Wednesday. "Natural attrition in a company like ours is 15-20% per year, so we shrink naturally 15-20% by people just leaving." Klarna, which provides buy now, pay later loans, told Bloomberg TV last December it stopped hiring in 2023 at the same time that it ramped up AI use among its ranks. However, even after it announced a hiring freeze, the company continued to advertise open roles, TechCrunch reported. It's currently hiring for 10 roles, primarily in Europe. Klarna's long-awaited IPO was expected early this year after the company filed its prospectus in March. But President Donald Trump's sweeping tariff announcement in early April roiled markets, leading Klarna and other companies, including ticket marketplace StubHub and stock trading app eToro, to delay their offerings. With the market having stabilized in recent weeks, IPOs are again on the calendar. EToro debuted on Wednesday, and its stock popped even after the company priced above the expected range. Fintech company Chime Financial filed its prospectus on Tuesday. And digital health company Hinge Health is on tap to go public next week. Klarna has yet to provide an updated timeline on its IPO plans.

CEO Who Bragged About Replacing Human Workers With AI Realizes He Made a Terrible Mistake

Swedish buy-now-pay-later company Klarna, whose CEO once bragged about its automated customer service AI bots doing the work of "700 full-time agents," is now in deep trouble. The fintech outfit is facing net losses of $99 million for the first quarter of this year, CNBC reports, which is more than double compared to the same period last year. The company had already paused its highly anticipated IPO in the US last month, which once valued it at over $15 billion. And it's all particularly noteworthy because of how CEO Sebastian Siemiatkowski previously bragged that he hadn't hired anyone in a year, following a doubling down on AI tech. During an interview with Bloomberg earlier this month, however, Siemiatkowski struck a dramatically different tone, revealing that the gambit hadn't paid off. He admitted that "there will always be a human if you want" when it comes to customer service -- a sign of the times, as investors are starting to ask some tough questions given widespread economic uncertainty. Nonetheless, it wasn't a complete reversal. Siemiatkowski defended his embrace of AI last week, boasting that the tech allowed Klarna to shrink its workforce by 40 percent. During its Monday earnings call, an AI-generated avatar of Siemiatkowski took over for the executive, the Financial Times reports, showing that the company is far from giving up on the tech. But public support for the tech is unmistakably falling off. Translation company Duolingo has faced a torrent of pushback from social media users, particularly on TikTok, after its controversial CEO Luis von Ahn announced that AI will gradually replace all contractors. However, while it could be easy to see Klarna as the canary in the coal mine for the AI industry as a whole, its rapidly mounting losses involve other factors as well. As the FT points out, many of the company's American customers are failing to repay their buy-now-pay-later loans. Klarna's credit losses have risen 17 percent year-on-year to $136 million, reflecting widespread economic uncertainty and falling consumer confidence as president Donald Trump's trade war takes its toll. In response, Klarna has said that it's "closely monitoring changes in the macroeconomic environment" and "remains well-positioned to adapt swiftly if required."

Klarna retreats from AI-only customer service push, resumes hiring amid quality concerns: Report

Fintech firm Klarna Group is scaling back its heavy reliance on artificial intelligence (AI) for customer service after chief executive Sebastian Siemiatkowski admitted the automation-led model had led to a drop in service quality. "As cost unfortunately seems to have been a too-predominant evaluation factor when organizing this, what you end up having is lower quality," he said at Klarna's Stockholm headquarters, according to a Bloomberg report. After over a year-long hiring freeze aimed at accelerating its AI transformation and cutting costs, Klarna is now recalibrating. "Really investing in the quality of human support is the way of the future for us," he said. The company has restarted hiring for customer service roles in what the Bloomberg report described as a rare move. Klarna is also testing a new support model in which remote workers such as students and people in rural areas can log in and handle customer queries on demand, similar to how drivers operate on ride-hailing platforms. Two agents are currently part of the pilot. "We also know there are tons of Klarna users that are very passionate about our company and would enjoy working for us," the report quoted Siemiatkowski as saying. He emphasised that customers must always have the option to speak to a human, both from a brand and business standpoint. The reversal comes months after Klarna announced that AI was handling the workload of 700 support agents, a move that sent shares of call centre giant Teleperformance SE sharply lower. Despite the change in approach, Klarna remains focused on embedding AI across its operations. The company is rebuilding its technology stack with AI at the centre and developing a digital financial assistant to help customers access better interest rates and insurance deals. The company's partnership with OpenAI also remains strong. "We wanted to be OpenAI's favourite guinea pig," Siemiatkowski said, recalling Klarna's early collaboration with the AI company in 2023.

Klarna on track to reach $1 million in revenue per employee

This content has been selected, created and edited by the Finextra editorial team based upon its relevance and interest to our community. Since 2022, Klarna has streamlined its workforce by ~40% while raising the share of tech employees from 36% in 2022 to 52% in Q1 2025. The firm says 96% of employees use AI daily -- helping drive a 152% increase in revenue per employee since Q1'23 and putting Klarna on track to reach $1 million in revenue per employee. Klarna says AI is slashing costs across the business, most noticeable in customer service, where costs per transaction have dropped by 40% since Q1'23 whilst maintaining customer satisfaction levels. Presenting the results in its Q1 financial filing, CEO Sebastian Siemiaktowski, says: "Our AI-first strategy is driving exceptional returns, we're outpacing competitors, our merchant network is scaling rapidly, and our next-gen products are reshaping money management for millions" A year ago, Siemiatkowski boasted in a letter to shareholders that the BNPL giant's AI assistant was performing the work of 700 employees and was part of a strategy to reduce the workforce from 5000 human employees to just 2000. However, in a recent interview with Bloomberg, he concedes that the strategy may have gone too far. "As cost unfortunately seems to have been a too predominant evaluation factor when organising this, what you end up having is lower quality," he says. "Really investing in the quality of the human support is the way of the future for us." Klarna is now testing a group of staffers "in an Uber-type of setup" that allows them to work remotely as customer service reps. "From a brand perspective, a company perspective, I just think it's so critical that you are clear to your customer that there will be always a human if you want," says Siemiatkowski.

Company replaces 700 employees with AI, two years later, it's rehiring humans as AI falls short

Klarna, the buy-now-pay-later firm, will increase human hires after AI customer service fell short of expectations. Despite cost savings from AI automation, CEO Sebastian Siemiatkowski admitted the quality wasn't up to par. This shift reverses earlier workforce reductions driven by AI adoption, mirroring similar trends at companies like CrowdStrike, Duolingo, and Microsoft.Klarna, the Swedish buy-now-pay-later company, is preparing to hire more human workers after relying heavily on artificial intelligence for customer service did not produce the expected results. According to a report in Futurism, the company's leadership has admitted that AI customer agents could not match human performance, forcing a rethink of its staffing approach. Over the past two years, Klarna partnered with OpenAI to reduce its workforce and automate several functions. By 2023, the company had paused hiring and shifted most of its customer service work to AI. This move led to significant cost savings, including $10 million on marketing, as AI handled tasks such as translation, art production, and data analysis. Despite this shift, CEO Sebastian Siemiatkowski has acknowledged that the quality of work done by AI agents did not meet expectations. "From a brand perspective, a company perspective, I just think it's so critical that you are clear to your customer that there will be always a human if you want," said Siemiatkowski. He added, "Cost unfortunately seems to have been a too predominant evaluation factor when organising this, what you end up having is lower quality." Klarna's IPO prospectus filed in March shows a notable reduction in staff. The company had 5,527 full-time employees at the end of December 2022, which dropped to 3,422 by December 2024. Klarna claimed AI was doing the work of 700 customer service agents. Even as recently as December 2024, Siemiatkowski said, "AI can already do all the jobs that we, as humans do." Klarna's use of AI to cut jobs reflects a larger trend in the technology and finance industries. Earlier this month, cybersecurity firm CrowdStrike announced it would cut five percent of its workforce, replacing roles with AI. Duolingo, a language-learning app, has also begun reducing its reliance on contractors, stating that AI will take over some tasks. The company said it had taken a similar approach in 2012 when it focused on mobile platforms. It plans to automate performance reviews and limit headcount growth to teams that cannot further automate their operations. Microsoft has laid off about 6,000 employees, nearly 3% of its global workforce, in one of its biggest job cuts to date. The decision comes as the company expands its use of artificial intelligence across its products and services. Among those impacted was Gabriela de Queiroz, Director of Artificial Intelligence for Microsoft for Startups. In a social media post, she wrote, "I was impacted by Microsoft's latest round of layoffs. Am I sad? Absolutely. I'm heartbroken to see so many talented people I've had the honor of working with being let go." According to a Bloomberg report, over 40% of the roles cut in Washington state were from software engineering teams. The layoffs affected staff at different levels and across global locations, as Microsoft reorganised to reduce management layers. Despite being told to stop working immediately, de Queiroz said she stayed a little longer to attend meetings and say her goodbyes. "That felt right to me," she noted in her post. The company's strategy shift has raised questions, as the layoffs include roles in AI even as Microsoft pushes for wider adoption of the same technology. De Queiroz added, "To those also affected -- you're not alone. We are at least 6,000."

After firing 700 employees for AI, Swedish company admits their mistake and plans to rehire humans. What went wrong?

Swedish fintech company Klarna is reversing its decision to replace human employees with AI after facing declining service quality. After laying off around 700 workers and heavily investing in AI for customer service and marketing tasks, the company has acknowledged that cost-cutting was prioritized over quality. CEO Sebastian Siemiatkowski admitted the AI agents failed to meet expectations, prompting Klarna to begin rehiring human workers, particularly for remote customer support roles.Swedish fintech company Klarna, known for its "buy now, pay later" services, is reversing its decision to replace human workers with artificial intelligence. In a significant shift that began in 2022, Klarna laid off around 700 employees and embraced AI-powered systems, primarily through a partnership with OpenAI. This transition was aimed at improving efficiency and reducing costs. By 2023, Klarna had completely halted its recruitment of human workers. The company relied heavily on generative AI to handle tasks such as translation, data analysis, and art production. Klarna claimed at the time that its AI customer service agents were performing work equivalent to 700 human employees. CEO Sebastian Siemiatkowski even stated in December 2024 that "AI can already do all of the jobs that we, as humans, do." Despite initial optimism, the company has now acknowledged that the shift to AI has negatively impacted service quality. In recent interviews, Siemiatkowski admitted that cost-cutting had been given too much importance when implementing the AI systems. "Cost unfortunately seems to have been a too predominant evaluation factor when organising this, what you end up having is lower quality," he told Bloomberg. Siemiatkowski also emphasized the importance of retaining a human presence in customer service. He said, "From a brand perspective, a company perspective, I just think it's so critical that you are clear to your customer that there will always be a human if you want." The company is now planning a large-scale recruitment drive to bring back human workers, particularly in customer service roles. Klarna intends to offer remote positions, targeting students and people in rural areas. This new model resembles a gig economy approach, allowing employees to log in on-demand. Klarna is not alone in experiencing issues with overreliance on AI. Similar moves by other companies have sparked debate about the effectiveness of replacing humans with machines. Duolingo, for instance, announced that it would phase out contractor roles in favor of AI and automate performance reviews. CrowdStrike, a cybersecurity firm, also laid off 5% of its workforce, shifting some of that work to AI systems. However, many companies are now seeing the limitations of this approach. A January 2024 survey of 1,400 executives showed widespread dissatisfaction with AI integration, with many citing a lack of talent and underwhelming results. In the UK, a survey revealed that 55% of business leaders who had replaced humans with AI regretted the decision. Klarna's pivot to AI was not only controversial for its workforce impact but also for how it was executed. The 2022 layoffs were announced via a pre-recorded video, and the public release of personal data of dismissed employees drew further criticism. Despite this, the company pressed forward with AI-driven operations and even celebrated a $10 million reduction in marketing costs. Now, just two years later, it is adjusting course. Although Klarna still plans to gradually reduce its workforce to around 2,500, the company's recent strategy marks a recognition that not all roles can be fully automated. It has learned that the human element remains essential in maintaining service quality and brand integrity.

After Firing 700 Humans For AI, Klarna Now Wants Them Back -- 'Tons Of Klarna Users Would Enjoy Working For Us,' Says CEO

Enter your email to get Benzinga's ultimate morning update: The PreMarket Activity Newsletter Klarna is backpedaling after cutting hundreds of human jobs and replacing them with artificial intelligence. The Swedish buy-now-pay-later company now says real people are essential to customer service and plans to bring them back -- but in a gig-style setup. Deloitte's #1 fastest-growing software company partners with Amazon, Walmart & Target - Many are rushing to grab 4,000 of its pre-IPO shares for just $0.26/share! Mode Mobile developed a smartphone called EarnPhone, which allows users to earn and save money by playing video games, listening to music and reading the news. With the phone priced at an affordable $99, the barriers to adoption are low. Earning Opportunity for All Smartphone Users Mode EarnPhone State-of-the-art smartphone device includes built-in earning features. EarnOS Proprietary earning software turns smartphones into EarnPhones. Min. Investment: $1000 Share Price: $0.26 Valuation: $310M Click To Learn More About Mode MobileFrom All-In on AI to Human Reboot Klarna CEO Sebastian Siemiatkowski, once eager to make the company OpenAI's "favorite guinea pig," is now rethinking that approach. "From a brand perspective, a company perspective, I just think it's so critical that you are clear to your customer that there will be always a human if you want," he told Bloomberg. Don't Miss: Hasbro, MGM, and Skechers trust this AI marketing firm -- Invest before it's too late. 'Scrolling To UBI' -- Deloitte's #1 fastest-growing software company allows users to earn money on their phones. You can invest today for just $0.30/share with a $1000 minimum. The company previously laid off workers and paused hiring, touting its AI chatbot as capable of doing the work of 700 support agents. That strategy helped save $10 million on marketing and contributed to Klarna's push for efficiency after its valuation plunged from $45.6 billion to $6.7 billion in 2022. But now, Klarna is shifting again. The new plan is apparently to hire remote customer service agents who can log in and out as needed, similar to Uber drivers. The company is targeting students, rural populations, and even existing users to fill these roles. "There are tons of Klarna users that are very passionate about our company and would enjoy working for us," Siemiatkowski told Bloomberg. Reality Check for AI This change comes after increasing signs that AI can't fully handle human-facing tasks. Siemiatkowski admitted to Bloomberg that Klarna went too far. "As cost unfortunately seems to have been a too predominant evaluation factor when organizing this, what you end up having is lower quality," he said. Trending: Maker of the $60,000 foldable home has 3 factory buildings, 600+ houses built, and big plans to solve housing -- this is your last chance to become an investor for $0.80 per share. Investor Chamath Palihapitiya called Klarna's move a warning for the tech sector. He wrote on X that the company's shift could force many startups to pivot to simply "use AI for narrow use cases" and warned that replacing humans with "probabilistic code" is "fraught with edge cases." Klarna's approach now blends AI with human support, rather than relying entirely on automation. As spokesperson Clare Nordstrom told CX Dive: "AI gives us speed. Talent gives us empathy. Together, we can deliver service that's fast when it should be, and empathetic and personal when it needs to be." Klarna says it's committed to this hybrid model going forward, but the workforce will still shrink over time due to natural attrition. The company expects to drop from 3,000 employees to around 2,500 within a year as tech continues to evolve. For Klarna, it's less about reversing course entirely and more about acknowledging that humans still matter, just on different terms. Read Next: Nancy Pelosi Invested $5 Million In An AI Company Last Year -- Here's How You Can Invest In Multiple Pre-IPO AI Startups With Just $1,000. Be part of the next med-tech breakthrough for only $350 -- 500+ surgeries already done with nView's AI system. Image: Shutterstock Market News and Data brought to you by Benzinga APIs

Klarna CEO: AI Helped Drive 40% Reduction in Staff | PYMNTS.com

Klarna's CEO is reportedly attributing a 40% reduction in staff to the company's AI investments. Sebastian Siemiatkowski told CNBC on Wednesday (May 14) that artificial intelligence (AI) was just one factor behind the shrinking headcount, saying the Swedish pay later FinTech had also seen some natural attrition. "The truth is, the company has shrunk from about 5,000 to now almost 3,000 employees," said Siemiatkowski. "If you go to LinkedIn and look at the jobs, you'll see how we're shrinking." As the report notes, Klarna has made no secret of its aggressive AI adoption, going as far as using an "AI-generated version" of Siemiatkowski on a 2024 earnings call to illustrate the technology's potential to automate jobs. Klarna teamed with OpenAI in 2023 and introduced an AI customer service assistant using its technology the following year. While the company has said AI is performing the work of 700 customer service agents, Siemiatkowski said the reduced headcount wasn't solely because of its artificial intelligence investments. "We have simply communicated to our employees that what we're going to do is we're gonna shrink, so we're going to stop hiring," Siemiatkowski said Wednesday. "Natural attrition in a company like ours is 15-20% per year, so we shrink naturally 15-20% by people just leaving." Siemiatkowski's comments came less than a week after a separate interview in which he said Klarna had begun a hiring effort to ensure customers always have the option of speaking with a human customer service rep. "From a brand perspective, a company perspective, I just think it's so critical that you are clear to your customer that there will always be a human if you want," the CEO told Bloomberg News. PYMNTS wrote last month about fear among workers that they'll lose their jobs because of AI. MIT economics professor David Autor argues that AI will for the most part augment workers instead of replacing them. "Over the last 200 years, we have automated so much of what we do," he said in late March at the MIT AI Conference. "We have mechanized. We have moved ourselves out of agriculture, out of manufacturing, out of back-breaking toil...We have made labor more valuable during that period." Still, fears remain. Research by PYMNTS Intelligence from earlier this year found that 54% of workers think AI poses a "significant risk" of widespread job displacement. These fears cut across industries and demographics. Some groups are more concerned than others, with people in technology and non-customer-facing roles showing the most concern (58%), while healthcare and education workers felt less worried at a respective 48% and 52%.