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On Tue, 27 Aug, 4:04 PM UTC
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[1]
Sweden's Klarna says AI chatbots help shrink headcount
STOCKHOLM (Reuters) - Swedish payments group Klarna said it had reduced hundreds of jobs and sees more reductions to come as it implements AI to handle customer queries, saying on Tuesday chatbots can sharply reduce the time taken to resolve issues. The "buy now pay later" company, widely expected to seek a stock market listing next year, has been one of the early adopters of GenAI to cut costs and boost productivity. The company, which said it had swung to a first-half adjusted profit of 673 million Swedish crowns ($66 million), said its AI assistant was performing the work of 700 employees, reducing the average resolution time from 11 minutes to just two. "About 12 months ago, we would have been about 5,000 active positions within the company, and we are now down to about 3,800," CEO Sebastian Siemiatkowski said in an interview, adding that almost all of the reduction had been achieved through attrition, not layoffs. "By simply not hiring, which we haven't done since September ... the company is kind of becoming smaller and smaller," he added. Average revenue per employee over the past 12 months had increased by 73%, rising from 4 million crowns to 7 million. "We will continue to not recruit anything other than engineers for a significant time," he said, adding that the headcount could eventually fall to 2,000, without giving a timeframe. At the time of a peak valuation of $46 billion in 2021 - on the basis of a fundraising carried out at the time - Klarna was unprofitable with much less revenue and had about 7,000 employees. While total labour costs will come down, Klarna expects to pay significantly more per individual, the company said. Klarna also reported first-half revenue of 13.3 billion crowns, up 27% from a year before and boosted by revenue growth of 38% in the U.S. Its adjusted profit compares with a loss of 456 mln crowns last year. Siemiatkowski said an initial public stock offering next year "sounds reasonable," but there was no definite commitment by the company to launch an IPO. He said Klarna might lean towards a U.S. listing but had also seriously evaluated some European options as well. (Reporting by Supantha Mukherjee; Editing by Terje Solsvik and David Holmes)
[2]
Sweden's Klarna Says AI Chatbots Help Shrink Headcount
STOCKHOLM (Reuters) - Swedish payments group Klarna said it had reduced hundreds of jobs and sees more reductions to come as it implements AI to handle customer queries, saying on Tuesday chatbots can sharply reduce the time taken to resolve issues. The "buy now pay later" company, widely expected to seek a stock market listing next year, has been one of the early adopters of GenAI to cut costs and boost productivity. The company, which said it had swung to a first-half adjusted profit of 673 million Swedish crowns ($66 million), said its AI assistant was performing the work of 700 employees, reducing the average resolution time from 11 minutes to just two. "About 12 months ago, we would have been about 5,000 active positions within the company, and we are now down to about 3,800," CEO Sebastian Siemiatkowski said in an interview, adding that almost all of the reduction had been achieved through attrition, not layoffs. "By simply not hiring, which we haven't done since September ... the company is kind of becoming smaller and smaller," he added. Average revenue per employee over the past 12 months had increased by 73%, rising from 4 million crowns to 7 million. "We will continue to not recruit anything other than engineers for a significant time," he said, adding that the headcount could eventually fall to 2,000, without giving a timeframe. At the time of a peak valuation of $46 billion in 2021 - on the basis of a fundraising carried out at the time - Klarna was unprofitable with much less revenue and had about 7,000 employees. While total labour costs will come down, Klarna expects to pay significantly more per individual, the company said. Klarna also reported first-half revenue of 13.3 billion crowns, up 27% from a year before and boosted by revenue growth of 38% in the U.S. Its adjusted profit compares with a loss of 456 mln crowns last year. Siemiatkowski said an initial public stock offering next year "sounds reasonable," but there was no definite commitment by the company to launch an IPO. He said Klarna might lean towards a U.S. listing but had also seriously evaluated some European options as well. ($1 = 10.2004 Swedish crowns) (Reporting by Supantha Mukherjee; Editing by Terje Solsvik and David Holmes)
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Swedish fintech company Klarna has reported a significant reduction in customer service staff thanks to the implementation of AI chatbots, highlighting the growing impact of artificial intelligence on employment in the financial sector.
Swedish fintech giant Klarna has made headlines by significantly reducing its customer service workforce through the implementation of artificial intelligence (AI) chatbots. The company, known for its "buy now, pay later" services, has reported a substantial decrease in the number of customer service agents required to handle inquiries, dropping from 1,700 to just 700 in less than two years 1.
Klarna's Chief Executive, Sebastian Siemiatkowski, revealed that AI chatbots now handle a staggering 2.3 million customer conversations weekly. This technological advancement has not only streamlined operations but also led to significant cost savings for the company. The AI-driven approach has resulted in faster response times and improved customer satisfaction, with 99.7% of chats being resolved without human intervention 2.
The dramatic reduction in human customer service representatives at Klarna underscores the growing influence of AI on employment in the financial sector. While the company has managed to improve efficiency and reduce costs, the shift raises questions about the future of customer service jobs in an increasingly automated industry. Klarna's move reflects a broader trend in fintech and other sectors, where AI and machine learning are being leveraged to optimize operations and enhance customer experiences.
Amidst these technological advancements, Klarna has reported improved financial results. The company announced its first quarterly profit since 2019, with earnings of 185 million Swedish crowns ($17 million) for the first quarter of the year. This financial turnaround comes after a challenging period marked by significant losses in 2022 1.
Klarna's success with AI chatbots may set a precedent for other companies in the financial services sector. As businesses seek to balance cost-efficiency with customer satisfaction, the adoption of AI-driven solutions is likely to accelerate. This trend could reshape the landscape of customer service across various industries, potentially leading to further job displacements while also creating new opportunities in AI development and management.
As AI becomes more prevalent in customer-facing roles, regulators may need to address concerns about data privacy, algorithmic bias, and the ethical implications of AI in financial services. The rapid adoption of these technologies by companies like Klarna may prompt discussions about the need for new guidelines or regulations to ensure fair and transparent use of AI in customer interactions.
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