'We probably over-indexed a little bit on that,' CEO admits
Swedish fintech company Klarna is trying to course-correct as its chief executive officer admitted that the firm may have gone too fast on its adoption of artificial intelligence.
Klarna has operated an AI-first strategy that CEO Sebastian Siemiatkowski previously said was able to drive "exceptional returns."
"AI is slashing costs across the business, most noticeable in customer service, where costs per transaction have dropped by 40% since Q1'23 whilst maintaining customer satisfaction levels," the company said in May.
However, the adoption has also prompted the company to trim its workforce by thousands and drop vendors to focus on AI.
"We probably over-indexed a little bit on that, and then in the last six months we have been trying to course-correct," Siemiatkowski told Reuters.
Klarna's jobs portal now shows more than 20 jobs available in Europe and the United States, after freezing hiring amid its AI adoption in late 2023.
According to Siemiatkowski, the company's major focus now is on boosting productivity and improving products for customers and merchants.
Klarna's aggressive AI strategy
The move from the fintech firm comes after the company's aggressive AI strategy, which resulted in 96% of employees using AI daily and increased revenue per employee by 152% since the first quarter of 2023.
Since 2022, the company said it was able to streamline its workforce by around 40%, with Siemiatkowski telling CNBC that headcount had shrunk from about 5,000 to almost 3,000 employees.
But the cuts are not only because of AI, according to the CEO.
"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," he said as quoted by CNBC in May.
"Natural attrition in a company like ours is 15 to 20% per year, so we shrink naturally 15 to 20% by people just leaving."
The company also noted in March that it was able to hike the share of tech employees from 26% in 2022 to 52% in the first quarter of 2025.
Klarna's course correction
The course correction from Klarna reflects findings that organisations are struggling to show the added value from AI.
A report from Deloitte last year revealed that 41% of organisations may have struggled to define and measure the impact of their efforts on generative AI.
In Klarna's case, Siemiatkowski said the $2 million savings that it got by dropping Salesforce software in favour of its AI-built data tools were not significant for investors.
"My investors are not going to be cheering, they're going to look for growth, and they're going to look to what we offer our customers and how that's doing," he told Reuters.
But this doesn't mean that the company is completely pulling back on AI, according to Klarna Chief Financial Officer Niclas Neglen.
"That's definitely not just a cost play... it's going to be a lot more than that, and it's going to be able to help us provide better services to consumers and merchants over time," Neglen told Reuters.
