AI Transformation Reshapes Klarna's Workforce and Finances
The prominent buy now, pay later provider Klarna has revealed that its strategic push into artificial intelligence has enabled the company to dramatically reduce staff numbers while simultaneously boosting compensation for remaining employees by nearly 60%. This significant shift comes as the Swedish fintech giant navigates a period of intense technological change within the financial services sector.
Chief Executive Sebastian Siemiatkowski disclosed that the company's headcount has plummeted from 5,527 employees in 2022 to just 2,907 today, representing a reduction of nearly half the workforce over a three-year period. The majority of this decrease occurred through natural attrition, with departing staff members being systematically replaced by advanced technological systems rather than new hires.
Technology Replaces Hundreds of Roles
The figures highlight the profound impact of Klarna's internal artificial intelligence programme, which has progressively diminished its reliance on outsourced workers, particularly in customer service functions. The company confirmed that AI technology now performs work equivalent to 853 full-time employees, a substantial increase from the 700 full-time equivalent roles it had replaced earlier this year.
This technological transformation has yielded remarkable financial outcomes for the company. Klarna managed to achieve a 108% surge in revenues while maintaining operating costs at consistent levels. Siemiatkowski described this achievement to analysts as "pretty remarkable, and unheard of as a number, among businesses" during a recent earnings call.
Substantial Pay Increases for Remaining Staff
Despite the significant reduction in workforce, Klarna has directed a portion of its efficiency savings toward enhancing compensation for its remaining employees. The company implemented a clear commitment to ensure that gains from AI applications would benefit staff through improved remuneration packages.
Average employee compensation, including taxes and pension contributions, has jumped from $126,000 (£96,000) in 2022 to $203,000 today, representing a 60% increase over the three-year period. This strategic move aims to align employee incentives with investor interests in driving further technological adoption throughout the organisation.
Siemiatkowski, who holds personal investments in AI firms including OpenAI and Perplexity through his family investment vehicle Flat Capital, indicated that further workforce optimisations might lie ahead. He emphasised the company's focus on increasing revenue per employee, which has now reached $1.1 million per staff member, with ambitions to continue this upward trajectory.
The executive simultaneously cautioned against excessive investment in AI datacentres, suggesting that the technology would likely become more efficient over time. His comments came as Klarna reported a 26% revenue increase to $903 million for the quarter ending September, surpassing analyst expectations of $882 million.
However, the company also disclosed a $95 million loss during the same period, significantly higher than the $4 million loss recorded last year. Klarna attributed this primarily to accounting standard changes required for its recent listing on the New York Stock Exchange in September.
