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Over the past year, Klarna, a leader in the “buy now, pay later” sector, has made significant shifts in its operational strategies, notably halting its hiring practices. To adapt to this new phase, the company is now focusing on retaining its current workforce and enhancing productivity through advancements in artificial intelligence (AI).
In a recent interview with Bloomberg, Klarna CEO Sebastian Siemiatkowski elaborated on the company’s current trajectory. He noted that the decision to cease hiring has led to a natural reduction in staff, with around 1,000 employees leaving the organization since the freeze began. As a result, the workforce stands at approximately 3,500 employees.
Siemiatkowski emphasized that as the company reduces salary expenditures and boosts productivity through AI, employees can expect more frequent salary increases. “We’re going to share a part of the improvements achieved through efficiency gains with our employees,” he stated, assuring that the restructuring would benefit those who remain.
As part of this initiative, employees are encouraged to embrace AI technologies for various tasks that enhance productivity. Siemiatkowski highlighted the applications of AI in several key areas, including generating visual content, developing marketing strategies, conducting financial analyses, creating products, and addressing customer service inquiries. This push not only aims to boost morale but also to improve operational efficiency.
The CEO had previously indicated in a Financial Times interview in September that the long-term goal is to scale down the workforce to about 2,000 employees, with the expectation that AI will fulfill roles traditionally held by humans.
Klarna has been vocal about the substantial potential of AI as a workforce replacement. In February, the company reported that its AI customer service assistant was performing tasks equivalent to that of 700 human agents within its first month of operation.
In an innovative demonstration of AI capabilities, Klarna recently showcased an AI-generated representation of CEO Siemiatkowski, utilizing it to announce the company’s latest financial results, further illustrating the transformative impact of AI in corporate environments.
The Landscape of ‘Buy Now, Pay Later’
Despite the challenges faced by Klarna and the financial sector at large, the “buy now, pay later” industry is experiencing notable growth. Klarna alongside other platforms like Affirm and Afterpay recently reported unprecedented activity, with a new record set for spending during the Cyber Monday shopping event.
According to analytics from Adobe, consumer expenditures using these services hit an all-time high of $991.2 million, signifying a strong embrace of this payment model.
Overall, spending with buy now, pay later services surged to $75.1 billion in 2023, reflecting a 14% growth from the previous year’s total of $65.6 billion. This trend indicates a robust demand for flexible payment solutions among consumers, even as the companies within the space navigate their own internal transformations and workforce adjustments.
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