Klarna: AI lets us cut thousands of jobs – but pay more

The buy now, pay later firm Klarna is seeking to get rid of almost half its employees in the coming years through efficiencies it says arise out of its investment in artificial intelligence (AI).

The firm has already cut its workforce from 5,000 to 3,800 in the past year, and wants to reduce that to 2,000 employees by using AI in marketing and customer service.

Boss Sebastian Siemiatkowski told the BBC the job cuts would mean Klarna could pay its remaining workers more.

But he said the government needed to think about what to do about AI, which he predicted would have “a dramatic impact” on jobs and society.

“I think politicians already today should consider whether there are other alternatives of how they could support people that may be effective,” he told the Today programme, on BBC Radio 4.

He said it was “too simplistic” to simply say new jobs would be created in the future.

“I mean, maybe you can become an influencer, but it’s hard to do so if you are 55-years-old,” he said.

The recent proliferation of AI has put its benefits and risks under the spotlight.

Earlier this year, the International Monetary Fund (IMF) said it believed AI would impact nearly 40% of all jobs, and it would “likely worsen overall inequality”.

In other sectors, such as the games industry, developers have warned they are already losing work to AI.

Union fears

Klarna – which is based in Sweden, and has two UK offices – disclosed its job-cutting plans as it announced interim results which showed it increased its revenue by 27% to 13.3 billion Swedish krona (£990 million).

“Our proven scale efficiencies have been enhanced by our investment in AI, which has driven down operating expenses and improved gross profits,” it said.

It comes as unions have warned of mass job losses amid the growth of AI and are calling for legislation to protect workers.

Mr Siemiatkowski said Klarna would reduce its headcount through what he called “natural attrition” – effectively a hiring freeze, where staff aren’t replaced after they leave.

Typically this means the people that remain are left with an increased workload.

But Mr Siemiatkowski contended that AI would be replacing this work, and even claimed it was a potential “positive development” for some individuals who may be paid more.

While he said it was “critical” for government to consider what to do about those who lost their jobs, he suggested there was no “stopping progress” for firms like his.

“It’s important that Europe and democracies are ahead in the evolution of AI,” he said.

Klarna is understood to be shrinking its workforce ahead of a listing on the stock exchange, which has recently been dominated by firms heavily investing in AI, such as Nvidia and Microsoft.

This means Klarna being seen as a big proponent of the tech may make its stock more appealing to investors when it does eventually go public.

Source: www.bbc.com