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Home » “We stopped hiring!” »: FinTech CEO reveals how AI replaced hundreds of employees in one year
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“We stopped hiring!” »: FinTech CEO reveals how AI replaced hundreds of employees in one year

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Klarna CEO Sebastian Siemiatkowski has fully embraced artificial intelligence as a transformative force within the fintech company, influencing a major part of his business: the workforce.

In a recent interview with Bloomberg TV, he revealed that he decided to pause recruiting a year ago and that it stemmed from AI’s ability to automate tasks previously handled by humans.

Siemiatkowski expressed confidence in the potential of AI, saying: “It’s just a matter of how we apply it and use it.”

Klarna’s AI-First approach

Klarna, a payment service offer “buy now, pay later” options, has a network of more than 575,000 business partners, as stated on its website.

His company’s growth has coincided with broader technological change, particularly a renewed interest in AI, which has raised concerns about its potential impact on employment and the workforce.

A McKinsey & Company 2023 Report predicts that 12 million American workers will need to transition into new occupations by 2030 due to advances in AI technology.

This trend is reflected in companies like Klarna, as Siemiatkowski revealed that the company stopped hiring a year ago. “I think what we’ve done internally hasn’t been as widely reported,” he said.

“We stopped recruiting about a year ago, so there were 4,500 of us, and now we’re 3,500. We experience natural attrition, like any tech company. People stay for about five years, so 20% leave each year. By not hiring, we’re just shrinking, aren’t we? » said Siemiatkowski.

The human cost of AI-driven job losses

Siemiatkowski shared the company’s message to employees: “What will happen is that Klarna’s total salary cost will decrease, but part of the gain will be reflected in your salary.”

Klarna has already reduced its workforce by more than 1,000 employees over the past year, a move partly attributed to increased adoption of AI.

A August report says the buy now, pay later company is preparing to reduce its workforce by nearly 50% as AI automation becomes more widespread.

While Klarna website currently lists open positions, a spokesperson told Business Insider that the company is not actively recruiting to increase its workforce.

Instead, Klarna focuses on filling specific core roles, primarily in engineering.

The AI ​​jobs apocalypse: Companies are scaling back investments

The company’s aggressive adoption of AI and resulting job cuts made headlines; This is not an isolated incident in the tech industry.

Several other tech giants and companies across industries are adopting similar strategies. Here are some of them:

1.MSN: The prominent American web portal was an early adopter of AI-driven journalism. Since 2020, the company has relied on AI to generate news content, which has resulted in many journalists being laid off, according to a 2020 report from Seattle weather.

2. Google: The tech giant started 2024 with several rounds of layoffs, mainly affecting its advertising division. While the company hasn’t directly linked these job cuts to AI, the timing fits with its significant investments in AI in customer service and ad sales processes.

3. Dukaan: Indian e-commerce company Dukaan gained particular attention when it replaced 90% of its customer support staff with an AI chatbot.

CEO Summit Shah publicly defended the move, pointing to substantial cost savings and reduced customer wait times.

4. Ikea: The global furniture company is undergoing a significant transformation in its call center operations, introducing an AI robot named Billie.

In a unique approach, Ikea is retraining relevant employees to take on new roles as interior design consultants.

5. BleuFocus: Chinese marketing agency BlueFocus made a significant operational change by replacing human content writers and designers with generative AI shortly after acquiring an AI service license.

6. Sales force: The US cloud-based software maker recently laid off around 700 employees, sparking speculation that AI could be poised to fill those roles as the company ramps up its artificial intelligence efforts.

7. Duolingo: In January, Duolingo reduced its contractor workforce by 10%, citing the adoption of AI for content translation as a contributing factor.

8. Turnitin: Known for its AI detection platform, the company laid off 15 employees at the end of 2023. The company’s CEO suggested that AI-driven efficiency could lead to a 20% workforce reduction by mid -2024.

Companies plan workforce reductions using AI

While many companies have already integrated AI into their operations and made job cuts, several tech giants are poised to significantly reduce their workforce due to advances in AI.

1.IBM: IBM has revealed plans to gradually replace 30% of its back-office functions with AI over the next five years, affecting around 7,800 positions.

The company has already scaled back hiring for some office roles, anticipating more substantial changes over the coming decade.

2. BT Group: British telecoms giant BT Group plans to cut around 55,000 jobs by 2030, with AI-based solutions taking over around 10,000 of those positions.

Although the company says not all customer service roles will be automated, AI is poised to become an essential part of its future workforce.

As AI continues to evolve, its impact on the job market is undeniable. While it offers potential benefits, it also raises concerns about job losses and economic inequality. Striking a balance between technological progress and human well-being is crucial.

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