Klarna shifts focus from cost cuts to growth

Global companies are racing to harness AI to help them improve efficiency, lower operational costs and enhance decision-making, but the transition is proving rocky

The CEO of Sweden’s Klarna, one of the early adopters in Europe of artificial intelligence, says the company may have gone too far in using the technology to cut costs and is now focusing on improving its services and products.

Sebastian Siemiatkowski made the remarks in an interview with Reuters on Tuesday. The buy-now, pay-later lender made its market debut in New York on Wednesday. Its shares jumped 30% at the open to $52 apiece, well above its IPO price of $40, giving the fintech a valuation of $19.7 billion.

Global companies are racing to harness AI to help them improve efficiency, lower operational costs and enhance decision-making, but the transition is proving rocky.

Klarna has cut thousands of jobs, dropped vendors such as Salesforce Inc and turned to AI to create marketing campaigns, saving millions but now realizing it went too fast, too soon.

We probably over indexed a little bit on that, and then in the last six months we have been trying to course correct, Siemiatkowski told Reuters from New York.

He added that a major focus was boosting productivity and improving products for customers and merchants.

Klarna raised $1.37 billion in its U.S. initial public offering (IPO), valuing the company at $15 billion and setting the stage for a market debut that could set the trend for high-growth fintech listings.

In May, Klarna used an AI avatar of Siemiatkowski to present its quarterly earnings. It even started a hotline for customers to talk directly with an interactive AI avatar trained on Siemiatkowski’s real voice, insights and experiences.