Klarna CEO says AI helped company shrink workforce by 40%

Klarna CEO Sebastian Siemiatkowski said the company has managed to shrink its headcount by about 40%, in part due to investments in artificial intelligence and natural attrition in its workforce.

"The truth is, the company has shrunk from about 5,000 to now almost 3,000 employees," Siemiatkowski told CNBC's "Power Lunch" on Wednesday. "If you go to LinkedIn and look at the jobs, you'll see how we're shrinking."

The Swedish fintech provider has been outspoken about its aggressive adoption of AI tools across the company, while touting the productivity gains that have come along as a result. The company deployed an "AI-generated version" of Siemiatkowski to announce its third-quarter results last year to demonstrate that AI could automate many jobs.

Klarna partnered with ChatGPT maker OpenAI in 2023 and launched an AI customer service assistant using its technology a year later. The company said last year that AI was doing the work of 700 customer service agents.

Klarna's headcount fell from 5,527 full-time employees as of the end of December 2022 to 3,422 staffers last December, according to the company's IPO prospectus filed in March. The company attributed the reduction to its efforts to leverage AI and lower its overall headcount, adding that it expects headcount to continue to fall over time.

Siemiatkowski said the headcount reduction wasn't solely due to AI, but also because of attrition.

"We have simply communicated to our employees that what we're going to do is we're gonna shrink, so we're going to stop hiring," Siemiatkowski said Wednesday. "Natural attrition in a company like ours is 15-20% per year, so we shrink naturally 15-20% by people just leaving."

Klarna, which provides buy now, pay later loans, told Bloomberg TV last December it stopped hiring in 2023 at the same time that it ramped up AI use among its ranks. However, even after it announced a hiring freeze, the company continued to advertise open roles, TechCrunch reported. It's currently hiring for 10 roles, primarily in Europe.

Siemiatkowski said in a separate Bloomberg interview last week that the company will soon look to recruit more human customer service agents to work "in an Uber type of setup." He acknowledged a full tilt toward AI-based support roles resulted in lower quality work.

Klarna's long-awaited IPO was expected early this year after the company filed its prospectus in March. But President Donald Trump's sweeping tariff announcement in early April roiled markets, leading Klarna and other companies, including ticket marketplace StubHub and stock trading app eToro, to delay their offerings.

With the market having stabilized in recent weeks, IPOs are again on the calendar. EToro debuted on Wednesday, and its stock popped even after the company priced above the expected range. Fintech company Chime Financial filed its prospectus on Tuesday. And digital health company Hinge Health is on tap to go public next week.

Klarna has yet to provide an updated timeline on its IPO plans.