In a striking demonstration of artificial intelligence's impact on business operations, the buy now, pay later giant Klarna has revealed that its AI initiatives have helped nearly halve its workforce while simultaneously boosting remaining staff salaries by approximately 60%.
Workforce Transformation Through Technology
Chief executive Sebastian Siemiatkowski disclosed that Klarna's headcount has dropped dramatically from 5,527 employees in 2022 to just 2,907 today, representing one of the most significant workforce reductions in the fintech sector. This substantial decrease occurred primarily through natural attrition, with departing staff members being replaced by advanced technology systems rather than new hires.
The Swedish-founded company, which launched in 2005, has seen its internal AI programme steadily reduce reliance on outsourced workers, particularly in customer service roles. The technology now performs work equivalent to 853 full-time employees, up from 700 earlier this year, demonstrating the accelerating pace of automation within the organisation.
Financial Performance and Compensation Changes
This technological transformation has yielded remarkable financial outcomes. Klarna managed to achieve a 108% increase in revenues while keeping operating costs essentially flat, a feat Siemiatkowski described as "pretty remarkable, and unheard of as a number, among businesses" during an earnings call with analysts.
The efficiency gains have directly benefited remaining staff, with average compensation packages – including employee-related taxes and pension contributions – surging by 60% over the past three years. Average pay per employee has jumped from $126,000 (£96,000) in 2022 to $203,000 today, reflecting the company's commitment to sharing AI-driven savings with its workforce.
"We have made a commitment to our employees that all of these efficiency gains, and especially the applications of AI, should also, to some degree, come back in their pay cheques", Siemiatkowski explained, emphasising the importance of aligning employee incentives with investor interests in driving technological change.
Future Outlook and Market Position
Despite reporting a $95 million loss for the quarter ending September, significantly higher than last year's $4 million loss, Klarna's underlying performance shows strength. The company attributed the increased loss primarily to accounting standard changes required for its September listing on the New York Stock Exchange.
The firm reported a 26% revenue increase to $903 million for the quarter, surpassing analyst expectations of $882 million. Siemiatkowski, who holds personal investments in AI firms including OpenAI and Perplexity through his family investment vehicle Flat Capital, indicated that further workforce optimisation lies ahead.
Klarna now generates $1.1 million in revenue per employee, a metric the CEO hopes to continue improving through ongoing technological advancement. However, he simultaneously cautioned against excessive investment in AI datacentres, predicting that the technology would become more efficient over time.
This transformation at one of Europe's most prominent fintech companies signals a broader shift in how financial services firms are leveraging artificial intelligence to reshape their operations, workforce structure, and compensation models in an increasingly automated business landscape.
