Klarna Reassesses AI Strategy to Prioritize Customer Service and Growth
Klarna, a leading buy-now, pay-later fintech company based in Sweden, has scaled back its aggressive push toward artificial intelligence (AI) automation after initially embracing it to cut costs.
The company, which raised $1.37 billion in a U.S. initial public offering (IPO) on September 9, 2025, valuing it at $15 billion, had previously reduced its workforce from 5,000 to 3,800 by leveraging AI technologies, including a chatbot that replaced the work of 700 staff members.
This shift reduced customer query resolution times from 11 minutes to just two. However, CEO Sebastian Siemiatkowski recently acknowledged to Reuters that the company may have over-prioritized cost-cutting at the expense of service quality and product development.
Klarna’s initial AI adoption included replacing vendors like Salesforce with in-house AI tools, saving approximately $2 million, and even using an AI avatar of Siemiatkowski to present earnings and interact with customers.
Despite these innovations, the company is now course-correcting by focusing on hiring human staff again, with over two dozen open positions listed.
Siemiatkowski emphasized that investors prioritize growth and customer satisfaction over minor cost savings, prompting Klarna to balance AI efficiency with human-driven service improvements.
This strategic pivot has significant implications for both users and businesses. For consumers, Klarna’s renewed focus on human staff could mean enhanced service quality, addressing potential gaps left by AI-driven interactions.
For merchants, improved products and services could strengthen Klarna’s competitive edge in the U.S., its largest market, where it rivals companies like Affirm.
The IPO marks a milestone for Klarna, signaling confidence in its growth potential as it refines its AI strategy to prioritize long-term value over short-term savings.
FAQ
How is Klarna using AI in its operations?
Klarna uses AI to handle customer queries via chatbots, create marketing campaigns, and develop in-house data tools, reducing costs and improving efficiency. However, it is now balancing AI with human staff to enhance service quality.
Why did Klarna decide to hire more staff after AI adoption?
Klarna recognized that over-reliance on AI for cost-cutting compromised customer service and product development. Hiring more staff aims to improve customer experience and drive growth, aligning with investor priorities.
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