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On Fri, 9 May, 8:02 AM UTC
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Klarna Is Hiring Customer Service Agents After AI Couldn't Cut It on Calls, According to the Company's CEO
Now, the company is reversing course and hiring human customer service agents again. Months after touting AI's potential to replace human work, Klarna CEO Sebastian Siemiatkowski is backtracking and reversing an AI-induced hiring freeze to bring on more human staff. Siemiatkowski, 43, told Bloomberg on Thursday that Klarna is hiring human workers again to ensure that customers always have a human presence to talk to, if needed. "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," Siemiatkowski told the outlet. Related: Klarna CEO Says AI Could Help Reduce Company Headcount By 50% Siemiatkowski tells Bloomberg that the AI-focused strategy Klarna employed for the past few years wasn't the right path. He says that while AI customer service chatbots were cheaper to employ than human staff, they resulted in a "lower quality" output. So now Klarna is recruiting a new batch of customer service employees, and the company will now focus on providing "quality" human support for customers, he said. In its recruitment drive, the company is targeting students, rural populations, and dedicated Klarna users who are passionate about the company. The roles are fully remote. "Really, investing in the quality of human support is the way of the future for us," Siemiatkowski told Bloomberg. In December, Klarna paused all hiring a year prior as it focused on AI investments. The company's headcount dropped 22% in that time frame to 3,500 employees, mostly because of attrition, Siemiatkowski disclosed at the time. He asked Klarna's employees to turn to AI to help fill in the gaps left by their departing colleagues. In February 2024, the company claimed AI could do the work of 700 customer service agents and had taken on 75% of the company's customer chats, or about 2.3 million conversations, within a month of launch. The bot handled questions about topics like refunds, returns, and payments in more than 35 languages. Related: There Are New Rules for 'Buy Now, Pay Later' Programs -- Here's What to Know Early tests with Klarna's customer service AI chatbot showed that the AI churned out exact answers from existing documentation and passed on customers to human support agents quickly. Gergely Orosz, an author and writer at The Pragmatic Engineer, wrote on X last February that Klarna's AI chatbot acted "basically as a filter" to reach human customer support agents when he tested it.
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Klarna takes foot off AI gas as CEO acknowledges importance of human customer service
This content has been selected, created and edited by the Finextra editorial team based upon its relevance and interest to our community. A year ago, Klarna CEO Sebastian Siemiatkowski boasted in a letter to shareholders that the BNPL giant's AI assistant was performing the work of 700 employees. At the time, the company revealed that it had trimmed its workforce through natural attrition from 5000 to 3800 over the last year and Siemiatkowski said there was an ambition to get this down to 2000, thanks largely to AI. However, in an interview with Bloomberg, Siemiatkowski concedes that the strategy has gone to 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.
[3]
Klarna rethinks AI customer service push as as CEO acknowledges value of human touch
This content has been selected, created and edited by the Finextra editorial team based upon its relevance and interest to our community. A year ago, Klarna CEO Sebastian Siemiatkowski boasted in a letter to shareholders that the BNPL giant's AI assistant was performing the work of 700 employees. At the time, the company revealed that it had trimmed its workforce through natural attrition from 5000 to 3800 over the last year and Siemiatkowski said there was an ambition to get this down to 2000, thanks largely to AI. However, in an interview with Bloomberg, Siemiatkowski concedes that the strategy has gone to 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.
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Klarna Focuses on Human-Powered Customer Service | PYMNTS.com
Pay-later firm Klarna is reportedly rethinking some of its AI-centered cost-cutting. Now, CEO Sebastian Siemiatkowski told Bloomberg News in an interview posted Thursday (May 8), the Swedish startup is undertaking a hiring effort to make sure customers always have the option of talking to a human customer service rep. Siemiatkowski said the firm is testing a group of employees "in an Uber-type of setup" where they can log in and work remotely, hoping to ultimately replace "the few thousand human agents" that Klarna outsources now. "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," the CEO said. As Bloomberg notes, Klarna had paused hiring for more than a year while it focused on developing its artificial intelligence (AI) capabilities. But Siemiatkowski said that strategy is no longer the right fit. "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. "Really investing in the quality of the human support is the way of the future for us." PYMNTS explored the limits of AI-powered customer service in a report earlier this year, noting that two years after the debut of ChatGPT, many customer-facing chatbots aren't smarter. Rather, AI has been relegated to helping human workers research company policies and product information that they can pass along to customers. "With concerns over reliability, more companies are restricting the usage of generative AI and opting for a more secure pathway," Marlene Wolfgruber, computational linguist at ABBYY, told PYMNTS. The report also notes that some high-profile cases have cast a shadow over using chatbots directly with the public, considering the potential financial and brand damage if the chatbot or AI agent hallucinates. For example, there was a case in which Air Canada's AI chatbot told customer Jake Moffatt that he could purchase a bereavement fare at full price first and get the discounted bereavement fare if requested within 90 days. However, the chatbot was wrong. The airline had no such policy. Moffatt sued Air Canada and won, with the British Columbia Civil Resolution Tribunal ruling that Air Canada could not separate itself from the AI chatbot This isn't to say that Klarna is abandoning AI. In a post on X in March, Siemiatkowski compared the growth of the technology to that of mobile devices, saying, "just like when mobile came along, we talked about mobile first, now you need to be AI first."
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Klarna, the Swedish buy-now-pay-later giant, is shifting its strategy by hiring human customer service agents after realizing the limitations of AI-powered support. CEO Sebastian Siemiatkowski emphasizes the importance of human touch in customer interactions.
Klarna, the Swedish buy-now-pay-later (BNPL) giant, is making a significant shift in its customer service strategy. CEO Sebastian Siemiatkowski has announced that the company is reversing its AI-focused approach and returning to human-powered customer support 1. This decision comes after realizing that AI chatbots, while cost-effective, resulted in "lower quality" customer service 2.
In December 2023, Klarna paused all hiring and focused on AI investments, resulting in a 22% reduction in headcount to 3,500 employees 1. The company claimed that its AI could do the work of 700 customer service agents and handled 75% of customer chats within a month of launch 1. However, early tests showed that the AI chatbot primarily acted as a filter, quickly passing customers to human support agents 1.
Siemiatkowski now acknowledges that the AI-centric strategy was not the right path. He emphasizes the critical importance of having human representatives available for customers who prefer that option 3. The CEO stated, "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" 4.
Klarna is now actively recruiting customer service employees, targeting students, rural populations, and dedicated Klarna users passionate about the company 1. The company is testing a group of staffers "in an Uber-type of setup" that allows them to work remotely as customer service representatives 2. This approach aims to replace "the few thousand human agents" that Klarna currently outsources 4.
While Klarna is not abandoning AI entirely, the company is recalibrating its approach to customer service. Siemiatkowski compares the growth of AI technology to that of mobile devices, suggesting that companies need to be "AI first" in their strategies 4. However, the recent shift underscores the importance of finding the right balance between AI efficiency and the quality of human interaction in customer support.
Klarna's experience reflects a broader industry challenge in implementing AI for customer service. A recent report highlighted that many customer-facing chatbots haven't become significantly smarter two years after ChatGPT's debut 4. Concerns over reliability have led some companies to restrict the usage of generative AI in customer interactions, opting for a more secure approach where AI assists human workers rather than replacing them entirely 4.
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Klarna's CEO Sebastian Siemiatkowski announces a hiring freeze, citing AI's ability to perform all tasks. The company's workforce has shrunk by 22% in a year, raising questions about AI's impact on employment.
4 Sources
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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.
2 Sources
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Klarna, the Swedish fintech giant, has introduced an AI-powered shopping assistant that promises to transform the e-commerce experience. This innovative tool combines natural language processing with Klarna's vast product database to offer personalized shopping recommendations.
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Klarna's CEO Sebastian Siemiatkowski explains the company's move away from Salesforce and other SaaS applications, emphasizing the role of AI in data consolidation and predicting future trends in enterprise software.
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Shopify's CEO Tobi Lütke has issued a memo requiring teams to demonstrate why AI can't perform a job before requesting additional headcount, signaling a significant shift in the company's approach to workforce management and AI integration.
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