Klarna to shed workers as it prepares for stock listing

The firm said its average revenue per employee has risen 73% versus this time last year

Klarna has shed more than 1,000 workers in the last year partly due to AI and plans to cut almost 2,000 more as it prepares for an eventual stock market listing.

The buy now, pay later firm employed nearly 5,000 people this time last year, but has reduced its headcount to 3,800.

A spokesperson said that figure is likely to drop to around 2,000 in the coming years, without giving an exact time frame.

In Klarna’s interim results, released on Tuesday, it said the cuts come as artificial intelligence takes on more and more tasks at the firm, allowing it to reduce the number of human workers.

It said: Our proven scale efficiencies have been enhanced by our investment in artificial intelligence, which has driven down operating expenses and improved gross profits.

The firm said its average revenue per employee has risen 73% versus this time last year.

The firm, which is based in Sweden, has two UK offices in London and Manchester, as per its website, as well as dozens of others across Europe, the Americas, Australia and New Zealand.

It refused to comment on how many people it employs in the UK, but said the planned headcount reductions would be even across its sites.

AI has already been put to work extensively in customer service, Klarna said, where it estimates that its chatbot performs the work of 700 human employees.

It has cut the average resolution time of a customer service issue from 11 minutes to two, while “maintaining the same customer satisfaction scores as human agents”.

The firm is also using the technology in marketing.

It said: Our AI assistant now also serves as a powerful shopping assistant that helps consumers discover and choose products tailored to them, further transforming the shopping experience and helping them save time and money.

None of the reductions have come via redundancies, but instead through natural staff turnover along with a hiring freeze which the firm announced last year.

The interim results showed that Klarna increased its revenue by 27% to 13.3 billion Swedish krona ($0.098 billion), while it swung to an adjusted profit of 673 million krona ($65.62 million) from a loss of 456 million krona ($44.46 million) last year.

It comes amid a turnaround effort at the firm, which had been profitable until 2019 but started sustaining financial losses in 2020 following a rapid expansion in the US.

Shortly after, it plunged in estimated value between 2021 and 2022, from $46 billion (£34.8 billion) to just $6.7 billion.