Klarna cuts jobs to 2,000 with AI in marketing and service

Klarna, a buy now, pay later firm based in Sweden, is planning to reduce its workforce from 3,800 to 2,000 employees as part of its strategy to leverage artificial intelligence in marketing and customer service. This decision follows a previous reduction from 5,000 employees over the past year. CEO Sebastian Siemiatkowski indicated that the job cuts would allow the company to increase salaries for remaining staff, while also emphasizing the need for government action regarding the implications of AI on employment. The rise of AI has raised concerns about its impact on jobs, with the International Monetary Fund estimating that nearly 40% of all jobs could be affected. Siemiatkowski acknowledged the potential for increased inequality and the challenges faced by older workers in adapting to new job markets. He suggested that the government should explore alternative support mechanisms for those displaced by AI advancements. Klarna's decision to shrink its workforce is also seen as a strategic move ahead of a potential stock exchange listing, aiming to position itself favorably among investors interested in companies that are heavily investing in AI technologies. The firm reported a 27% increase in revenue, attributing this growth to efficiencies gained through AI. As unions express concerns over mass job losses due to AI, Klarna's approach includes a hiring freeze, termed 'natural attrition,' where positions are not filled after employees leave. While this may lead to increased workloads for remaining staff, the company believes that AI will ultimately alleviate these pressures, presenting a potentially positive outcome for the workforce.