Last fired, first hired: AI-powered Klarna seeks to rehire 700 displaced workers

Klarna‘s pivot back to human customer service marks a notable reversal in the fintech sector‘s approach to AI implementation. After replacing 700 workers with artificial intelligence during a financial downturn that saw its valuation plummet from $45.6 billion to $6.7 billion, the Swedish “buy now, pay later” giant is now acknowledging that AI-driven customer service has led to quality issues. This shift highlights an emerging recalibration in how companies balance automation and human interaction in consumer-facing roles.

The big picture: Klarna CEO Sebastian Siemiatkowski is initiating a new hiring pilot to rebuild the company’s human customer service capabilities after previous AI-driven staff reductions led to service quality problems.

• The company is developing an “Uber type of setup” for remote customer service workers who will eventually replace the company’s outsourced agents.
• Only two customer service employees from this pilot program have begun working so far, representing the early stage of this strategic shift.

What they’re saying: Klarna’s CEO has publicly acknowledged the shortcomings of their previous approach to customer service automation.

• “I just think it’s so critical that you are clear to your customer that there will be always a human if you want,” Siemiatkowski stated at the company’s Stockholm headquarters.
• “As cost unfortunately seems to have been a too predominant evaluation factor when organizing this, what you end up having is lower quality,” he admitted, adding that “really investing in the quality of the human support is the way of the future for us.”

Behind the numbers: Klarna’s dramatic valuation drop from $45.6 billion in 2021 to $6.7 billion prompted aggressive cost-cutting measures, including the AI replacement of hundreds of workers.

• The company’s subsequent recognition of service quality issues suggests that the financial benefits of AI implementation may have been offset by customer experience challenges.

Where we go from here: Despite the pivot back to human customer service representatives, Klarna isn’t abandoning AI technology entirely.

• Siemiatkowski indicated that AI will continue to be used to improve efficiency in the company’s software operations.
• The company plans to recruit from rural areas, student populations, and its own user base, with Siemiatkowski noting: “We also know there are tons of Klarna users that are very passionate about our company and would enjoy working for us.”