Klarna: AI lets us cut thousands of jobs

Klarna, a company specializing in instant payments, plans to lay off almost half of its employees in the coming years. This will be done through efficiency improvements that the company says will result from investments in artificial intelligence (AI).

The company has already reduced its workforce from 5,000 to 3,800 last year and wants to reduce this number to 2,000 employees by using artificial intelligence in marketing and customer service.

CEO Sebastian Siemiatkowski told the BBC that the layoffs would mean Klarna could pay its remaining employees more.

However, he said the government needed to think about what to do about artificial intelligence, which he predicted would have a “dramatic impact” on jobs and society.

“I think politicians should be thinking today about whether there are other alternatives to how they can effectively support people,” he said on BBC Radio 4's “Today” programme.

He said it was “too simplistic” to simply say that new jobs would be created in the future.

“I mean, maybe you can become an influencer, but that's difficult when you're 55,” he said.

The recent proliferation of AI has brought its benefits and risks into focus.

Beginning of the year The International Monetary Fund (IMF) said It was estimated that AI would impact nearly 40 percent of all jobs and would “likely exacerbate overall inequality.”

In other sectors, such as the gaming industry, developers warned They are already losing jobs to AI.

Klarna, which is based in Sweden and has two offices in the UK, announced its job cuts plans at the same time as it released interim results, which showed a 27% increase in revenue to 13.3 billion Swedish kronor (£990 million).

“Our proven economies of scale have been enhanced by our investments in AI, resulting in reduced operating costs and improved gross profit,” it said.

This move came as unions warned of massive job losses as a result of the development of artificial intelligence and called for legislation to protect workers.

Mr Siemiatkowski said Klarna would reduce its workforce through “natural attrition” – effectively a hiring freeze where employees who leave the company are not replaced.

Typically, this means that the remaining people face an increased workload.

But Mr Siemiatkowski argued that this work would be replaced by AI, even suggesting that this was a potential “positive development” for some people as they might earn more for it.

While he said it was “crucial” that the government consider what to do with those who lose their jobs, he also said progress for companies like his was unstoppable.

“It is important that Europe and democracies take a leading role in the development of AI,” he said.

Klarna apparently wants to reduce its workforce ahead of its IPO. The stock market has recently been dominated by companies that invest heavily in artificial intelligence, such as Nvidia and Microsoft.

This means that the fact that Klarna is considered a big proponent of this technology could make the company's stock more attractive to investors when the company eventually goes public.