Klarna Says AI Chatbots Helped Remove 1,200 Positions

The stark impact of artificial intelligence (AI) on the jobs market has been revealed by Klarna this week.

Reuters reported that the Swedish payments group said on Tuesday it had reduced hundreds of jobs, and it sees more reductions to come as it implements AI to handle customer queries.

Klarna reportedly said that AI chatbots can sharply reduce the time taken to resolve issues, and it comes ahead of a widely expected stock market listing next year.

AI chatbots

According to Reuters, Klarna said it had swung to a first-half adjusted profit of 673 million Swedish crowns ($66 million), and announced that its AI assistant was performing the work of 700 employees, reducing the average resolution time from 11 minutes to just two.

“About 12 months ago, we would have been about 5,000 active positions within the company, and we are now down to about 3,800,” CEO Sebastian Siemiatkowski was quoted as saying in an interview, adding that almost all of the reduction had been achieved through attrition, not layoffs.

“By simply not hiring, which we haven’t done since September … the company is kind of becoming smaller and smaller,” he added.

“We will continue to not recruit anything other than engineers for a significant time,” he reportedly said, adding that the headcount could eventually fall to 2,000, without giving a timeframe.

At the time of a peak valuation of $46 billion in 2021 – on the basis of a fundraising at the time – Klarna was unprofitable with much less revenue and had about 7,000 employees.

Jobs impact

While Klarna’s management said it has not carried out any layoffs, the fact that 1,200 positions are no longer being filled shows the potential of AI to impact the overall jobs market and recruitment.

In January 2024, when the International Monetary Fund (IMF) had warned that nearly 40 percent of jobs worldwide could be affected by AI, which could result in replacing jobs and worsening inequalities.

Then in March the left-of-centre thinktank, the Institute for Public Policy Research (IPPR), warned in a report that almost 8 million UK jobs could be lost to artificial intelligence in a “jobs apocalypse”.

But in June a study by digital services consultancy Nash Squared found that nearly three-quarters of UK tech leaders said they had deployed generative AI to at least some employees, but 99 percent said it was not yet replacing jobs.

However BT in 2023 had said it would cut 55,000 jobs by 2030, and that a fifth of the roles would be replaced by AI.