Klarna CEO: AI Reduces Workforce by Half and Increases Salaries

Sebastian Siemiatkowski, co-founder and CEO of Klarna, has made headlines with his insights on the transformative effects of artificial intelligence (AI) on the workforce. In a recent interview with Bloomberg Television, he candidly discussed the implications of AI and its impact on labor market dynamics.

Klarna’s Workforce Transformation

Siemiatkowski confirmed that Klarna has reduced its workforce from 7,400 to approximately 3,000 employees. He emphasized that despite the significant cut in personnel, the company has successfully increased its revenue and customer base. Klarna is currently not recruiting new employees, which has allowed it to avoid layoffs.

AI’s Role in Compensation

Alongside workforce reduction, Klarna has reinvested the savings from payroll into employee compensation. Siemiatkowski noted that employees are benefiting from the company’s internal AI implementations. The goal is to enhance job roles and improve overall compensation without expanding the workforce.

Concerns About AI Deployment

Despite the positive outlook on AI, Siemiatkowski expressed concerns regarding its adoption, particularly in non-democratic countries. He believes that while AI can bring societal benefits, there are significant challenges that need to be addressed.

Klarna’s Market Presence

Klarna recently launched its shares on the New York Stock Exchange, marking one of the largest flotations of the year. The company serves around 111 million customers globally, offering flexible payment options through major retailers, including:

• John Lewis
• Asos
• Argos
• Ticketmaster
• Booking.com

The Broader Implications of AI

In his commentary, Siemiatkowski highlighted a looming shift in knowledge work beyond banking, suggesting that society needs to adapt to these changes. He noted that roles such as translators could be significantly affected by AI advancements.

Risks of an AI Bubble

His statements follow a warning from the Bank of England about the risks of a potential AI bubble. The Bank cautioned that tech firms with high valuations may encounter a sharp market correction if progress in AI technology does not meet expectations.

As Klarna navigates these challenges, it remains at the forefront of integrating AI into its operations while addressing the broader societal implications of this technological evolution.