A Swedish fintech company is preparing for a major recruitment drive after realizing that artificial intelligence (AI) alone couldn’t effectively handle its customer service needs. Klarna, known for its buy now, pay later services, had turned to AI two years ago in an effort to boost efficiency by partnering with OpenAI and reducing its workforce.
However, CEO Sebastian Siemiatkowski has now acknowledged that the quality of work delivered by AI agents fell short of expectations, prompting the need to bring back human employees. According to a report by Futurism, Mr. Siemiatkowski admitted that while AI could handle certain tasks, it lacked the nuanced understanding and empathy required for effective customer interaction.
“From a brand perspective, a company perspective, I just think it’s so critical that you are clear to your customer that there will always be a human if you want,” he stated. He also noted that cost considerations had played too large a role in the decision to rely on AI, resulting in compromised quality.
In 2023, Klarna halted all hiring as it expanded its use of AI technologies. At one point, Mr. Siemiatkowski proudly claimed that Klarna had saved $10 million in marketing costs by using generative AI for tasks such as translation, art production, and data analysis. Even as recently as December 2024, he asserted that “AI can already do all the jobs that we, as humans, do.” The company had reported that AI was performing the duties of 700 customer service agents.
Klarna’s employee count dropped significantly from 5,527 full-time staff at the end of December 2022 to 3,422 employees by the end of 2024, according to its IPO prospectus filed in March.
AI’s Impact on Employment
Klarna is not alone in its pursuit of AI-driven job cuts. CrowdStrike, the cybersecurity firm behind a global IT outage, recently announced plans to cut 5% of its workforce and replace those roles with AI systems. Similarly, language-learning platform Duolingo revealed it would phase out contractors whose roles could be handled by AI.
Duolingo defended its decision by comparing it to a strategic shift it made in 2012 when it heavily invested in mobile technology. Going forward, AI will also be used to evaluate employee performance reviews, and additional staff will only be hired if automation cannot fulfill the team’s needs.
As companies continue to explore the balance between automation and human labor, Klarna’s reversal highlights the ongoing challenges of relying solely on AI for complex, customer-facing operations.
