Klarna reported a 27% revenue increase in the first half of 2024, driven primarily by its significant implementation of AI. CEO Sebastian Siemiatkowski indicated that this technology could potentially reduce the company’s workforce by half.
As Klarna prepares for a highly anticipated $20 billion IPO, it has achieved adjusted profits of $66 million in the first half of the year, a stark contrast to an adjusted loss of $45 million in the same period last year.
In his letter to shareholders, Siemiatkowski emphasized AI’s transformative effects, stating, “Our AI assistant now performs the work of 700 employees, reducing the average resolution time from 11 minutes to just 2, while maintaining the same customer satisfaction scores as human agents.”
The company has reduced its workforce from 5,000 to 3,800 over the past year through natural attrition, and more significant cuts are expected. In an interview with the Financial Times, Siemiatkowski mentioned, “Not only can we do more with less, but we can do much more with less. Internally, we speak directionally about 2,000 [employees]. We don’t want to put a specific deadline on that.”
To facilitate this transition, Klarna has implemented a hiring freeze for all positions except engineering, opting for natural attrition instead of layoffs.
Klarna’s expansion efforts in the US have proven successful, as the company now collaborates with a quarter of the top 100 merchants, resulting in a 93% year-on-year increase in gross profit in that market. Additionally, Klarna is encroaching on the territory of retail banks by introducing an account service for customers to store money and cashback rewards, aiming to integrate itself into everyday spending and saving habits.
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