Buy now pay later (BNPL) company Klarna has eliminated 1,200 roles with more expected to come as the fintech bets big on AI.
The Stockholm-based group has adopted an “attrition” downsizing policy wherein departing staff are no longer replaced with new hires as more responsibility is handed to automation.
Klarna told UKTN that no layoffs have taken place, nor will take place as part of the company’s emphasis on the role of AI.
Instead, roles are being eliminated at the point staff choose to leave. A spokesperson said these roles cover various departments, however, engineering was said to be the least affected.
Klarna said the role reduction is happening across all of its locations, including in the UK. The company declined to state how many UK roles would be affected.
Klarna has been gearing up for a public launch, hoping to cut costs and boost revenue with its use of AI.
In its latest accounts, the group posted half-year profits of $64m (£48.3m), compared with a loss of $43m compared with the same period the year before.
In November last year, Klarna established a UK holding company as part of plans to attract international investors via Britain’s financial and regulatory regime.
The choice to establish this holding company in the UK suggests confidence in the country, however, it does not necessarily mean the eventual IPO would take place in London.
Klarna provides BNPL services with which users can spread the cost of purchases into smaller payments over time.
Tighter regulation of BNPL was mentioned as a goal by Labour in the run-up to the July general election.
The appointment of Tulip Siddiq – a vocal advocate for BNPL regulation – as Economic Secretary to the Treasury further indicates this government’s intentions, however, nothing concrete has taken place.
