Klarna CEO credits AI for enabling 40% staff reduction while maintaining operations
Buy-now-pay-later giant Klarna has leveraged artificial intelligence technology to slash its workforce by approximately 40%, according to CEO Sebastian Siemiatkowski. Speaking to CNBC’s “Power Lunch,” he explained that the digital payment platform achieved this substantial reduction through a combination of AI-powered automation, an ongoing hiring freeze, and natural employee turnover.
“The truth is, the company has shrunk from about 5,000 to now almost 3,000 employees,” Siemiatkowski revealed during the interview. “If you go to LinkedIn and look at the jobs, you’ll see how we’re shrinking.”
Aggressive AI implementation strategy
The Swedish fintech powerhouse has rapidly integrated AI tools throughout its business operations to maximize efficiency and reduce costs. In a notable demonstration of its commitment to automation technologies, Klarna deployed an AI-generated digital twin of Siemiatkowski to present the company’s third-quarter financial results last year.
The financial technology firm also established a strategic partnership with OpenAI in 2023 and subsequently launched a sophisticated AI customer-service assistant in early 2024. Company representatives have stated that their artificial intelligence systems now handle workloads equivalent to approximately 700 human customer-service representatives.
Documented workforce transformation
Corporate documentation confirms the significant personnel reduction. According to official filings, Klarna’s headcount declined from 5,527 full-time employees at year-end 2022 to 3,422 by December 2024.
The company’s initial public offering prospectus, submitted in March 2025, explicitly attributes much of this substantial workforce contraction to AI integration initiatives and its strategic decision to maintain hiring restrictions.
Natural attrition playing key role
Siemiatkowski emphasized that direct layoffs represented only part of the reduction strategy. He highlighted that natural workforce attrition in financial technology companies typically ranges between 15 and 20 percent annually.
“We have simply communicated to our employees that what we’re going to do is we’re gonna shrink, so we’re going to stop hiring,” the chief executive explained. “Natural attrition in a company like ours is 15-20 percent per year, so we shrink naturally 15-20 percent by people just leaving.”
Regulatory concerns amid digital transformation
Alex Marsh, who heads Klarna’s United Kingdom operations, has cautioned regulators that new proposed financial regulations could potentially have unintended negative consequences. In statements to Bloomberg, Marsh argued that the rules would introduce “disproportionate friction” for consumers attempting to use digital payment services.
His comments highlight the tension between pursuing automation-driven efficiency gains and maintaining seamless user experiences.
Selective hiring continues despite freeze
Despite its overall hiring restrictions, Klarna continues advertising select open positions. Industry publication TechCrunch observed that the company listed ten available roles across European locations this spring.
Siemiatkowski disclosed that Klarna plans to soon recruit human customer service agents under an “Uber-type setup” to manage complex customer inquiries when AI solutions prove inadequate. The CEO acknowledged that completely pivoting to AI-only support had “resulted in lower quality work” in certain customer interactions.
IPO plans temporarily paused
Klarna submitted its IPO prospectus in March 2025, outlining plans for a New York Stock Exchange listing under the ticker symbol KLAR. However, the company temporarily suspended these plans in April after President Donald Trump announced new international tariff policies, which disrupted financial markets and triggered a wave of delayed public offerings across the fintech sector. According to specialized financial publication Sifted, the stock market debut is now anticipated for late 2025, though the company has not yet committed to a specific timeline.
Expanded services and valuation adjustments
With its customer base exceeding 93 million active users spanning 26 countries, Klarna has significantly expanded beyond its original buy-now-pay-later lending model.
The financial technology platform now provides diverse banking services including savings accounts, interest-bearing credit facilities, and integrated commerce solutions for merchants.
Despite this service expansion, the company’s market valuation has contracted from its 2021 peak of $45.6 billion to approximately $15 billion, based on 2025 financial disclosures.
Balancing AI and human touch
Financial technology analysts indicate that AI implementation will remain a critical factor as Klarna prepares for eventual public market entry. Potential investors will carefully evaluate cost efficiencies against customer satisfaction metrics, especially as competition intensifies from rival payment platforms like Affirm and PayPal.
Klarna’s ability to effectively balance technological automation with necessary human intervention may ultimately determine its market valuation when the company finally completes its public offering process.
How do you view Klarna’s AI-driven workforce transformation? Is this the future of financial services or a concerning trend? Share your thoughts below.