Klarna, the prominent buy now, pay later firm, has announced plans to significantly reduce its workforce, aiming to cut nearly half of its employees through increased reliance on artificial intelligence (AI). The company, which has already trimmed its workforce from 5,000 to 3,800 over the past year, intends to further decrease its headcount to 2,000 as it integrates AI into its marketing and customer service operations.
Klarna’s CEO, Sebastian Siemiatkowski, explained that the reductions are intended to boost productivity and profitability, allowing the company to offer higher wages to its remaining staff. He emphasized that the transformative effects of AI present challenges and opportunities, urging policymakers to consider how to support workers displaced by technological advances.
Siemiatkowski also critiqued the notion that new jobs will naturally arise to replace those lost to automation. “It’s too simplistic to assume that new roles will automatically emerge,” he said. He highlighted the difficulties older workers might face in adapting to new career paths, suggesting that the benefits of AI are not universally accessible.
The rise of AI has sparked widespread debate about its impact on employment and inequality. The International Monetary Fund (IMF) has projected that AI could affect nearly 40% of all jobs, potentially exacerbating existing inequalities. This concern is echoed by various sectors, including the games industry, where some developers report losing work to AI technologies.
In its interim financial results, Klarna reported a 27% increase in revenue, reaching 13.3 billion Swedish kronor (£990 million). The company attributed its improved financial performance to the efficiencies gained through AI, which have lowered operating expenses and boosted gross profits.
As the company prepares for a potential stock market listing, Klarna’s emphasis on AI could enhance its appeal to investors, following the trend of major firms like Nvidia and Microsoft, which have also heavily invested in the technology. However, the company’s plans to cut jobs amid the AI revolution have sparked concerns among unions and advocates, who are calling for stronger legislation to protect workers from the adverse effects of automation.
Siemiatkowski acknowledged the need for thoughtful government intervention but remained firm in his belief that technological progress cannot be halted. “It’s critical that Europe and democracies lead in the evolution of AI,” he stated, underscoring the balancing act between embracing innovation and addressing its societal impacts.
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