• Klarna CEO warns AI-driven job losses could hit globally, despite the company’s own failed experiment replacing staff with AI.
• The fintech cut its workforce by more than half using AI-powered chatbots, later rehiring staff due to technology limitations.
• Sebastian Siemiatkowski still sees AI’s potential in customer service, though Klarna avoids relying heavily on AI for underwriting decisions.

Klarna

Klarna CEO Sebastian Siemiatkowski, long seen as one of finance’s biggest AI cheerleaders, told Bloomberg the world has not reckoned with the job losses AI could bring.

He goes on to say that he expects that there is a massive shift coming to the job market. He indicates that many jobs will be generated but in the longer term he reckons that will not be sustainable. 

AI Replacement Fail

Klarna, the fintech company best known for its BNPL product, has invested heavily in AI. In early 2024, it launched an OpenAI-powered customer service chatbot claiming it could replace the work of 800 full-time agents.

This approach enabled Klarna to shrink its employee count from 7,400 to around 3,000 thousand, a staggering more than half of its workforce. This allowed them to cut costs and boost pay for their remaining workforce.

However, it soon became clear AI has too many limitations to fully replace a human workforce. Thus, earlier this year, Klarna rehired more customer service personnel to ensure that users can always speak to a human.This really highlights the risk of firm face when replacing humans with still a largely untested technology. At face value, AI seems like a great opportunity to reduce workforces and save costs.

However, instead this AI-led strategy led to poorer service and emphasizes the need for human interaction for customer satisfaction. Its hiring surge highlights limitations of AI in handling complex, empathetic customer interactions. It also reinforces the importance of valuing the human element. 

Now, despite this, Klarna CEO still believes that AI can do an equal or even better job of handling customer issues. However, he did disclose that Klarna does not currently use much AI around underwriting decisions.