Klarna—Reduced workforce by 40% through AI replacement, CEO later admitted cuts 'went too far'
Klarna reduced its workforce from about 5,000 to around 3,000 employees through aggressive AI adoption and a hiring freeze. CEO Sebastian Siemiatkowski publicly admitted the strategy 'went too far,' noting it reduced product quality and eroded customer trust. Employee satisfaction dropped significantly, with Glassdoor rating falling from 3.8 in 2022 to 3.0.
Scoring Impact
| Topic | Direction | Relevance | Contribution |
|---|---|---|---|
| Worker Rights | -against | primary | -1.00 |
| Overall incident score = | -1.101 | ||
Score = avg(topic contributions) × significance (critical ×2) × confidence (0.73)× agency (reactive ×0.75)
Evidence (3 signals)
Reduced workforce by 40% through AI replacement, CEO later admitted cuts 'went too far'
Klarna reduced its workforce from about 5,000 to around 3,000 employees through aggressive AI adoption and a hiring freeze. CEO Sebastian Siemiatkowski publicly admitted the strategy 'went too far,' noting it reduced product quality and eroded customer trust. Employee satisfaction dropped significantly, with Glassdoor rating falling from 3.8 in 2022 to 3.0.
CNBC reported Klarna CEO said AI helped shrink workforce by 40% from 5,000 to 3,000 employees
CNBC reported on May 14, 2025 that Klarna CEO Sebastian Siemiatkowski disclosed the company reduced its workforce from approximately 5,000 to 3,000 employees, largely driven by AI and natural attrition through a hiring freeze. AI reportedly replaced the work of 700 customer service agents. Revenue doubled from $433M to $903M quarterly while halving staff.
Bloomberg reported Klarna CEO admitted AI-driven cuts 'went too far' and announced plans to rehire human customer service agents
Bloomberg reported on May 8, 2025 that Klarna CEO Sebastian Siemiatkowski admitted the company's aggressive AI-driven workforce reduction 'went too far' and resulted in lower quality customer service. Customers complained about robotic responses, inflexible scripts, and Kafkaesque loops after bot failures. Siemiatkowski announced an 'Uber-type' flexible model to rehire human agents.