Klarna Uses AI to Enhance Efficiency, Halve Staff, and Raise Pay
Klarna, the buy-now-pay-later company, has credited AI-driven efficiencies for enabling a nearly 60% increase in employee pay while reducing its workforce significantly since 2022. The company's headcount has been cut from 5,527 to 2,907, largely attributed to natural attrition and replacement of departing staff with technology rather than new hires.
An internal AI program has taken over tasks previously outsourced, now performing the work equivalent to 853 full-time staff, up from 700 earlier in the year. Despite these changes, Klarna has grown its revenues by 108% while keeping operating costs flat during the period.
Average compensation per employee has risen from $126,000 in 2022 to $203,000 today, representing a 60% increase over three years. CEO Sebastian Siemiatkowski emphasized that efficiency gains, including the use of AI, should be reflected in employees' pay. He also aims to increase revenue per employee, which currently stands at $1.1 million, with potential further staff reductions planned.
Notably, Klarna has not hired new employees for several years. Siemiatkowski warned against costly data center investments for AI, expecting the technology to become more efficient over time.
In the three months ending in September, Klarna's revenue increased by 26% to $903 million, surpassing forecasts of $882 million. However, this period showed a $95 million loss due to accounting-standard changes following the company's listing on the New York Stock Exchange in September.
