Swedish payments group Klarna has announced a significant reduction in its workforce as it continues to integrate AI technology to handle customer queries more efficiently. The "buy now, pay later" giant, which is anticipated to seek a stock market listing next year, revealed on Tuesday that its AI-driven chatbots have drastically reduced the time required to resolve customer issues, cutting the average resolution time from 11 minutes to just two.
Klarna, an early adopter of generative AI to cut costs and increase productivity, reported that its AI assistant is currently performing tasks equivalent to the work of 700 employees. As a result, the company has seen a reduction in its workforce from approximately 5,000 active positions a year ago to about 3,800, with further reductions expected. CEO Sebastian Siemiatkowski noted that these reductions have been achieved almost entirely through attrition rather than layoffs.
"By simply not hiring, which we haven't done since September, the company is becoming smaller and smaller," Siemiatkowski said in an interview. He added that the company’s headcount could eventually fall to 2,000, though he did not specify a timeframe.
Despite the workforce reduction, Klarna's efficiency has improved, with average revenue per employee increasing by 73% over the past year—from 4 million Swedish crowns to 7 million. The company plans to continue limiting recruitment to engineering roles for the foreseeable future.
Klarna, which reached a peak valuation of $46 billion in 2021, was unprofitable at the time and employed around 7,000 people. However, the company has since turned its fortunes around, reporting a first-half adjusted profit of 673 million crowns ($66 million) this year, compared to a loss of 456 million crowns in the same period last year. First-half revenue also rose 27% year-on-year to 13.3 billion crowns, driven by a 38% increase in U.S. revenue.
As for a potential initial public offering, Siemiatkowski mentioned that an IPO next year "sounds reasonable," though Klarna has yet to make a definitive decision. While a U.S. listing is likely, the company is also considering European options.
