On April 10, 2005, at exactly 11:06:40 a.m., Klarna processed its very first transaction at Pocketklubben, a small Swedish bookshop. That unassuming purchase marked the beginning of what would become a global fintech revolution. Fast forward to 2023, and Klarna serves 85 million consumers and 500,000 retailers across 45 markets. Today, Klarna is no longer just a payments provider but an AI-powered e-commerce powerhouse—a transformation driven by grit, innovation, and a relentless pursuit of reinvention.
Klarna’s founders—Sebastian Siemiatkowski, Niklas Adalberth, and Victor Jacobsson—dreamed of creating a safer, simpler way for consumers to shop online. At the heart of their vision was “Buy Now, Pay Later” (BNPL), a solution that gave shoppers the flexibility to purchase items without upfront payments. It was a radical idea, designed to reduce fraud and build trust in an online shopping landscape plagued by scams.
When the trio pitched their concept at a Shark Tank-style competition in Stockholm, the judges were unimpressed. “It would never work,” they argued, “and even if it did, the banks would just do it themselves.” For most, that rejection might have been the end of the road. But Sebastian Siemiatkowski found unexpected motivation in a stranger’s words:
“The banks will never do it.”
“I still don’t know who that person was,” Sebastian later reflected, “but I’m as appreciative for the encouragement today as I was back then. It made me even more determined to disrupt the banking industry, and I hope they are proud of what we’ve achieved so far on the journey that we’re on!”
Klarna launched at a time when e-commerce was in its infancy and buyer confidence was low. By offering consumers the ability to try before they buy, Klarna’s BNPL model catalyzed trust in online shopping.
Eighteen years after its founding, Klarna celebrates a milestone often equated with maturity in Swedish tradition. CEO Sebastian Siemiatkowski compared Klarna’s growth to human development:
“We were once a start-up from humble beginnings, going through phases of childhood and teenage years. Now, as a young adult, Klarna is entering a new era of responsibility and focus.”
What began as a simple payments solution has grown into a comprehensive global shopping platform. Yet, Klarna’s evolution has not come without its share of challenges.
In a recent Bloomberg Technology interview, Siemiatkowski shared Klarna’s firm stance on AI’s potential: “AI can do all of the jobs that we humans do. It’s just a question of how we apply it and use it.”
According to Siemiatkowski, Klarna has stopped hiring for over a year, allowing AI to take on tasks that were once performed by humans. The workforce naturally shrinks through attrition, with employees staying an average of five years.
“People stay about five years, so 20% leave every year. And by not hiring, we’re simply shrinking, right?”
The company has downsized from 4,500 employees to 3,500 as of 2024. However, the CEO assured that Klarna’s vision is not about layoffs but about improving overall efficiency and rewarding employees.
By halting hiring and allowing for natural attrition, Klarna is reducing its headcount while maintaining productivity. At the same time, Klarna’s remaining employees are encouraged to use AI tools to improve their work output, as the efficiency gains directly impact their compensation and equity.
Understandably, AI adoption at this scale could cause anxiety among employees. However, Klarna has strategically addressed these concerns. The company communicated a clear incentive structure that aligns AI efficiency with employee rewards. Siemiatkowski explained:
“What’s going to happen is the total salary cost of Klarna is going to shrink, but part of the gain of that is going to be seen in your paycheck.”
This means that as AI improves productivity and reduces costs, Klarna plans to share these financial gains with its remaining employees in the form of higher salaries. The promise of tangible benefits has motivated Klarna’s workforce to embrace AI rather than resist it.
“People internally at Klarna are just rallying to deploy as much AI efficiency as they can because it just means it has direct implications on their equity and their cash compensation for working at Klarna.”
Klarna’s strategy to replace traditional roles with AI has already delivered measurable results:
AI Customer Support Assistant: Earlier in 2024, Klarna revealed its AI-powered customer service assistant was performing the work of 700 employees. The AI significantly improved response times, reducing query resolution from 11 minutes to just 2 minutes. This change also led to a 25% decrease in repeat inquiries, highlighting the efficiency and accuracy AI can achieve.
Klarna handles 85 million customers, supports 575,000 merchants, and processes 2.5 million transactions daily. For a company of this scale to implement AI-driven operational changes effectively raises broader questions about the future of white-collar employment.
The AI Assistant also enhances the shopping experience:
David Fock, Klarna’s Chief Product & Design Officer, explained the strategic use of AI:
“We’ve combined the intelligence of LLMs, the knowledge of Pricerunner, and the Klarna UX to build a smoother and more intuitive chat-based shopping experience.”
Internally, Klarna embraces an AI-first culture. The company reports that 87% of its workforce uses generative AI tools daily, spanning communications (93%), marketing (88%), and legal teams (86%). At the core of this transformation is Kiki, Klarna’s bespoke AI assistant powered by OpenAI’s GPT-4 model. Since its June 2023 launch, Kiki has handled 250,000 inquiries, enhancing employee productivity and freeing up time for strategic tasks.
Sebastian Siemiatkowski highlighted Klarna’s drive to explore AI:
“We push everyone to test, test, test and explore. We’re aiming to achieve a new level of employee empowerment, enhancing both our team’s performance and the customer experience.”
In a bold move, Klarna announced plans to replace established systems like Salesforce and Workday with in-house AI solutions. Klarna’s AI-driven tools aim to streamline CRM and HR functions, cutting costs and consolidating processes.
“We’re shutting down a lot of our SaaS providers, as we are able to consolidate. AI, standardization, and simplification are key to this transformation,” Sebastian explained.
This shift coincides with significant workforce reductions—from 5,000 employees to 3,800, with plans to shrink further to 2,000. While the move sparked skepticism, with Salesforce CEO Marc Benioff questioning compliance and data security, Klarna remains resolute in its AI-first approach.
In another daring step, Klarna used an AI-generated version of Siemiatkowski to present its 2024 financial results, highlighting 23% year-over-year revenue growth. While innovative, the video’s robotic delivery stirred mixed reactions and reignited debates on AI in leadership.
A survey revealed that 47% of C-suite executives believe AI could replace many CEO responsibilities. Yet experts, like Bhaskar Chakravorti of Tufts University, warn of risks:
“If companies start putting AI-generated executives in front of regular customers, that could cause a breakdown in trust.”
For Klarna, the experiment was less about replacing traditional communication and more about showcasing its willingness to push boundaries.
“A lot of jobs are going to be threatened, and what are the jobs that people like the least? It’s lawyers, CEOs, and bankers. And I happened to be both CEO and banker.”
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