Klarna to lay off thousands of workers to work on AI in bid to cut costs ahead of IPO

Klarna boss is cutting thousands of jobs and replacing workers with artificial intelligence (AI).

The chief executive of the buy now, pay later (BNPL) giant, Sebastian Siemiatkowski, has revealed plans to almost halve staff numbers to cut costs and boost productivity.

The Swedish payments company is preparing to launch a highly anticipated public listing next year.

Siemiatkowski, who co-founded the company in 2005, is leaning toward New York for a possible IPO but has considered European rivals.

A year ago, there were about 5,000 employees at Klarna, but now there are only 3,800, and that number could drop to 2,000, he said.

Klarna was an early adopter of artificial intelligence by using chatbots to handle customer queries, a move it says has dramatically reduced the time it takes to resolve issues.

The company added that its AI assistant can do the work of 700 employees and has reduced the average resolution time from 11 minutes to just two.

Almost all of the reduction is due to workers leaving and not being replaced, rather than layoffs, said Siemiatkowski, 42.

He added: “We will continue to not hire anyone other than engineers for a significant period of time.”

Klarna revealed yesterday that it had swung from a £33.9m loss in the first half to an adjusted profit of £49.9m in the same period a year earlier.

Revenue in the six months to the end of June was £984m, up 27 per cent on the previous year and driven by 38 per cent growth in the US.