Klarna Group Plc’s co-founder and CEO, Sebastian Siemiatkowski, has publicly acknowledged that the company's aggressive deployment of artificial intelligence (AI) in customer service has not delivered the expected results. During a press briefing at Klarna’s Stockholm headquarters, he admitted that prioritizing cost-cutting over service quality has led to unintended consequences.
A Cost-Cutting Strategy Backfires
In recent years, Klarna halted new hiring for over a year to build AI capabilities aimed at reducing operational expenses. One of the most high-profile moves was replacing approximately 700 human customer support agents with AI systems, which sent shockwaves through the industry and caused a significant valuation drop.
However, Siemiatkowski now emphasizes that the strategy needs realignment:
“As cost was unfortunately a too predominant evaluation factor when organizing this, we ended up with lower quality support. Really investing in the quality of human support is the way of the future for us.”
Human Support Makes a Comeback
In a move that signals a strategic shift, Klarna is now launching a new recruitment drive for customer support roles — a rare development for a company that previously relied heavily on automation. The firm is piloting a flexible, "Uber-like" model where remote agents, including students and individuals in rural areas, can log in and deliver on-demand support. Currently, two agents are participating in this trial.
Siemiatkowski highlighted the importance of human interaction:
“There are many passionate Klarna users who would love to work for us. From both a brand and company perspective, it’s critical to always give customers the option to speak to a human.”
Continued Focus on AI Integration
Despite scaling back its all-in AI approach for customer service, Klarna remains committed to leveraging AI across its broader operations. The company is rebuilding its technology infrastructure to put AI at its core, aiming to enhance efficiency and introduce new features such as a digital financial assistant that helps users secure better interest rates and insurance deals.
Klarna’s relationship with OpenAI also continues to be strong. Siemiatkowski recalled:
“We wanted to be [OpenAI’s] favorite guinea pig,” referring to their early collaboration in 2023, which showcased Klarna’s interest in pioneering AI innovations.
Navigating Post-Boom Challenges
Klarna’s recent strategic adjustments come after a turbulent period. The company's valuation peaked at $45.6 billion in 2021, but it plummeted to around $6.7 billion in 2022 amid funding challenges. Plans for an IPO to raise $1 billion at a valuation exceeding $15 billion have been paused due to market volatility.
The revelation in 2024 that AI was handling workload equivalent to 700 human agents notably impacted the call center industry, causing shares of France-based Teleperformance SE to fall sharply.
Workforce Restructuring on the Horizon
While Klarna is now hiring support agents again, the company expects its overall headcount to shrink through attrition, targeting approximately 2,500 employees within a year — down from around 3,000. Siemiatkowski indicated that advancements in AI technology could accelerate this decline, but confirmed it would likely take up to 12 months.
He joked:
“I feel a bit like Elon Musk — always saying it’ll happen tomorrow, but knowing it takes a little longer. It’s very likely within the next 12 months.”
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