Klarna, the payment processing service provider for e-commerce, is on target to cut its workforce in half to 2,000 by the end of 2025, if it continues to reduce roles at the same rate it has done for the last two years.
Latest headcount forecasts from FXC Intelligence come after the firm analysed a return to profitability by Klarna, shortly after the AI-powered brand announced it had removed 1,200 jobs in the last year through the use of AI and a hiring freeze. These job cuts have come as part of Klarna’s goal to reduce its headcount to 2,000 employees, though Klarna has declined to give a date for when it will reach this goal.
FXC Intelligence also revealed that if these headcount cuts slow down from now on, to a role reduction rate of just 10 per cent year-on-year, it will reach the 2,000-employee figure in the second half of 2026.
In 2021, Klarna was valued at $45.6billion before crashing to $6.7billion in 2022 – an 85 per cent reduction from the previous year – due to a broader economic slowdown for tech. However, its prolific use of AI has enabled it to break even after several years of losses and ahead of a long-anticipated US IPO, which could come as soon as next year.
Will Klarna achieve the right balance?
Lucy Ingham, editor-in-chief and head of content at FXC Intelligence, explained: “Klarna has arguably embraced AI more aggressively than any other company in the payments industry, which is likely to be key to it returning to profitability and so netting a higher valuation when it has its IPO. However, such a wholehearted embrace of AI has its drawbacks”.
While Klarna has been able to retain revenue growth and simultaneously cut its headcount, this appears to have come at the expense of employee satisfaction. FXC Intelligence analysis shows that the company’s average rating on Glassdoor has declined from 3.8 in 2022 to a current score of 3.0.
Ingham continued: “Our analysis suggests the initiatives have harmed employee satisfaction, which may create long-term challenges for the company around the retention of high-value employees, particularly when it becomes publicly traded. Klarna has also made itself highly reliant on OpenAI to supply the tools that are now integral to many of its operations, which could pose a problem if anything were to happen to the AI player in the future.”
