Klarna’s chief executive has said artificial intelligence has allowed the company to cut its workforce by more than half without making redundancies, calling it a sign of how quickly technology is reshaping knowledge work.
Sebastian Siemiatkowski, who co-founded the Swedish fintech in 2005, said the company’s headcount had fallen from 7,400 to about 3,000 employees while revenues and customer numbers continued to rise. “So we’re simply not recruiting, which means that we can avoid doing layoffs,” he told Bloomberg Television.
Klarna, known for its buy-now, pay-later payment services, listed its shares on the New York Stock Exchange in September in one of the largest initial public offerings of the year. Siemiatkowski said savings generated from automation had been redirected into higher pay for remaining staff, with total wage costs expected to stay flat as the workforce declined.
The company has credited its growing use of AI for driving efficiency gains. Last year, Klarna introduced an AI-powered chatbot to handle two-thirds of customer service enquiries, performing the work previously done by around 700 full-time human agents. The firm estimated that the move improved annual profit by about $40 million.
Automation accelerates structural change
Siemiatkowski said society needed to “figure out” how to manage the disruption caused by AI. He warned that while some new jobs would emerge, others — including roles such as translators — would be reduced. “I feel there is a massive shift coming to knowledge work; and it’s not just in banking, it’s in society at large,” he said.
He added that he expected broader “concerns for society” over the spread of the technology, particularly where it was adopted by non-democratic states. But he believed that AI would ultimately be beneficial. “It means less excess profits in what has been not as well-functioning markets as they could have been,” he told Bloomberg.
Siemiatkowski said his intention was to be more transparent than many business leaders about AI’s workforce effects. Klarna’s approach — replacing routine tasks through automation rather than cutting jobs outright — has been positioned as a model for how companies might restructure without large-scale layoffs.
Amazon and others issue similar warnings
The Klarna chief’s comments follow a warning from Amazon’s chief executive Andy Jassy, who said in June that rolling out generative AI and agents would change how work was done and that he expected a smaller corporate workforce in the next few years.
“As we roll out more generative AI and agents, it should change the way our work is done. We will need fewer people doing some of the jobs that are being done today and more people doing other types of jobs,” he told employees.
Few senior executives have spoken so openly about potential job losses linked to AI. While many companies emphasise productivity and growth opportunities, Klarna and Amazon’s statements suggest a growing acceptance that automation will significantly alter white-collar employment patterns.
Economists have said that financial services, retail and customer support are among the sectors likely to experience the earliest large-scale changes. Analysts also point to the risk that AI adoption could widen pay disparities, rewarding technical expertise and managerial oversight while compressing lower-skilled knowledge roles.
Klarna’s changing workforce model
Klarna revolutionised ecommerce payments through its buy-now, pay-later model, allowing customers to make purchases and pay later or in instalments. It now claims more than 100 million users worldwide, with retailers including John Lewis, Asos, Argos, Ticketmaster and Booking.com offering its service at checkout.
The company’s decision to embrace AI reflects a broader strategic shift towards leaner operations and higher automation. Analysts said its reinvestment of payroll savings into salaries for remaining staff suggested a deliberate move to retain skilled workers while allowing technology to absorb repetitive functions.
Siemiatkowski’s assertion that Klarna has effectively “stopped recruiting” points to a new phase of workforce management, where hiring freezes replace redundancies as the primary method of cost control. For HR professionals, the approach raises practical questions about how organisations measure productivity, motivate smaller teams and maintain employee engagement when machines handle a growing share of operational work.
A preview of knowledge work’s next phase
The Klarna chief’s prediction of a “massive shift” in knowledge work echoes wider debates about how generative AI tools will affect office-based employment. While automation has long been visible in manufacturing, its expansion into customer service, administration and content-based roles represents a fundamental change in how white-collar labour is organised.
Observers suggest that employers will increasingly face a dual challenge: managing the ethical and reputational risks of workforce automation while reskilling employees to operate alongside AI systems.
For Siemiatkowski, the transformation is already well under way. As he told Bloomberg, AI has not only altered Klarna’s cost structure but also redefined the company’s approach to work itself — a change that may soon extend far beyond fintech.
