Klarna, a prominent Buy Now, Pay Later (BNPL) company, has eliminated 1,200 roles with more expected as it heavily invests in artificial intelligence (AI). The Stockholm-based fintech has adopted an “attrition” approach, meaning positions left vacant by departing employees will not be filled, as automation takes on more responsibilities. Reports Technology News
Klarna clarified to UKTN that these changes do not involve layoffs, and no layoffs are planned as the company focuses on AI’s growing role. Instead, roles are being phased out when employees voluntarily leave. The affected roles span various departments, with engineering being the least impacted.
The role reductions are happening across all of Klarna’s global locations, including in the UK, although the company has not disclosed how many UK positions will be affected.
As Klarna prepares for a potential public launch, it is looking to reduce costs and increase revenue through AI. In its latest financial report, the group posted a half-year profit of $64 million (£48.3 million), a significant turnaround from a $43 million loss in the same period the previous year.
In November last year, Klarna set up a UK holding company as part of its strategy to attract international investors by leveraging Britain’s financial and regulatory environment. While this move signals confidence in the UK market, it does not necessarily indicate that the eventual IPO will take place in London.
Klarna offers BNPL services that allow customers to split the cost of purchases into smaller, manageable payments over time.
The regulation of BNPL services was a key issue for Labour in the lead-up to the July general election. The appointment of Tulip Siddiq, a strong proponent of BNPL regulation, as Economic Secretary to the Treasury, further underscores the government’s intentions, though no concrete actions have been taken yet.
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