Buy-now-pay-later outfit Klarna's CEO Sebastian Siemiatkowski is so thrilled with the performance of AI at his business that he's planning to shrink the human headcount by half – and predicts he won't be alone.
Klarna released its H1 report [PDF] yesterday, in which Siemiatkowski repeated the excitement he expressed previously about an internal AI powered by ChatGPT the fintech outfit launched earlier this year. After a couple quarters of trialling the bot, Siemiatkowski said, it's doing the work of around 700 employees – in less time, and with the same level of customer satisfaction.
Speaking to the Financial Times after the earnings release, Siemiatkowski declared his company, which now has around 3,800 employees, could shrink by an additional 1800 flesh and blood humans thanks to AI.
"Not only can we do more with less, but we can do much more with less," Siemiatkowski beamed, citing a projection of the firm needing only around 2,000 employees. However, "we don't want to put a specific deadline on that."
Siemiatkowski has been open for some time about what he sees as the role of AI in business. Klarna froze hiring late last year for all roles but engineers in the hopes AI would help fill the gaps left by eventual worker attrition. We're told Siemiatkowski's comments related to the earnings report don't reflect a change in strategy.
"We are not planning on cutting jobs," Klarna global press office lead John Craske told The Register. "However, we are acknowledging that, due to the use of AI we are not replacing those who decide to leave."
Klarna's not alone in embracing that trend. Data from the Federal Reserve Bank of Richmond suggests nearly half of companies choosing to implement internal AI systems are doing so to cut staffing costs, and 54 percent hope it will make remaining employees more productive.
That strategy has paid off for Klarna so far. It reported its average revenue per employee rose from around $400k to just shy of $700k in the past 12 months, and far smaller losses than the same half-year period in 2023. This doesn't include any cost savings associated with ditching task-specific enterprise software for AI, either.
Siemiatkowski reiterated in a Wednesday post on X that his intention was to turn his business into a hotbed of AI talent by allowing employees to leave – around 20 percent do so in a year, he estimated – and passing salary savings onto remaining staff in the form of raises.
So, we're just all settled on this job loss thing?
But what about the thousands of people who'll lose jobs at Klarna and others that take a cue from Siemiatkowski about the value of human capital? That's up to governments to sort out – and they'd better not quash innovation while doing it, the Klarna cofounder asserted in both the H1 report and an interview with the BBC (skip to about the one hour and 20 minute mark).
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"I have been one of the people in the tech community that have tried to highlight that [AI will have] a dramatic impact on jobs," Siemiatkowski told BBC Today. He also believes it's an oversimplification to simply say new jobs will be created that displaced workers can occupy.
"Maybe you can become an influencer," the Klarna chief quipped.
"It's critical for government to consider what we could do for the group that could be affected, but at the same point not stop progress," Simiatkowski added. "It's important that Europe and the democracies are ahead in the evolution of AI."
Just don't expect all companies embracing AI to care about the workers they displace. ®