Klarna on track to halve its workforce with AI by the end of 2025

• At current rates, Klarna will reach its AI-supported target of cutting half its workforce by the end of 2025, according to new analysis from FXC Intelligence, the leading provider of cross-border payments data and intelligence.
• Klarna’s prolific use of AI to reduce costs is working, with company financials showing that it is starting to return to profitability after several years of  losses.
• This may be coming at the expense of workforce satisfaction however, with Klarna’s average rating on Glassdoor declining from 3.8 in 2022 to 3.0 today.

Klarna will reach its AI-supported target of cutting half its workforce to 2,000 by the end of 2025 if it continues to reduce roles at the same rate it has done for the last two years. If headcount cuts slow down from now on, to a role reduction rate of just 10% YoY, it will reach the 2,000 employee figure in the second half of 2026.

This forecast is according to new FXC Intelligence analysis into Klarna’s AI-led return to profitability, and follows the announcement last week that Klarna has already removed 1,200 jobs in the last year through the use of AI and a hiring freeze. These manoeuvres have come about as part of an overall goal to reduce headcount to 2,000 employees, though Klarna has declined to give a date for when it will reach this goal.

Klarna’s prolific use of AI has enabled it to break even after several years of  losses and ahead of a long-anticipated US IPO, which may come as soon as next year.

Cutting headcount while retaining revenue growth is the fastest way for Klarna to regain as much of its previous high valuation as possible: in 2021 the company was valued at $45.6bn before crashing to $6.7bn in 2022 – an 85% reduction from the previous year – due to a broader economic slowdown for tech.

However, this has come at the expense of employee satisfaction. FXC Intelligence analysis shows that the company’s average rating on Glassdoor has declined from 3.8 in 2022 to 3.0 today. 

Lucy Ingham, Editor-in-Chief and Head of Content at FXC Intelligence, said:

“Klarna has arguably embraced AI more aggressively than any other company in the payments industry, which is likely to be key to it returning to profitability and so netting a higher valuation when it has its IPO. However, such a wholehearted embrace of AI has its drawbacks. 

“Our analysis suggests the initiatives have harmed employee satisfaction, which may create long-term challenges for the company around the retention of high-value employees, particularly when it becomes publicly traded. Klarna has also made itself highly reliant on OpenAI to supply the tools that are now integral to many of its operations, which could pose a problem if anything were to happen to the AI player in the future.”

To read the report in full click here.