Klarna CEO: Company stopped hiring because AI 'can do all of the jobs'

[e6quisitory]

https://archive.ph/DG7Jf

[spamizbad]

They stopped hiring because after raising over a billion dollars their value dropped 80%, they can't raise any more money, and after operating for 19 years they finally had a profitable quarter in Q2 2024. They are in "burn the furniture to heat the cabin" mode.

[evbogue]

If they bring their AI inhouse that can also generate heat.

[SOLAR_FIELDS]

They could just borrow a page from their Swedish buds Neo4j and aim for funding round Q to keep themselves alive

[jsbisviewtiful]

Came here to leave a snarky "guess I won't use Klarna then", but happy to see your comment. This info fills me with great joy.

[deanc]

They can’t even answer their support tickets using AI.

We just had one waiting for over two months (customer is multi million revenue per month) and after escalating twice, we get a link to the docs (didn’t have the info) and find out they have changed the name of their product for online checkout to Kustom after selling it off.

[mmmore]

If I were a CEO/PR team of large tech company that wanted to downsize, I would probably also say stuff like "AI efficiencies drive long term profitability". That said, I suspect in the short-medium term AI might increase salaries at the high end, but reduce opportunities at the low end. And of course, companies which seriously embrace AI advances, but in sensible ways, will do best.

https://www.klarna.com/international/regulatory-news/klarna-...

[PittleyDunkin]

> And of course, companies which seriously embrace AI advances, but in sensible ways, will do best.

The use here of "sensible" exemplifies a good way to predict basically anything you want about the market so long as you don't reveal what "sensible" means in concrete terms.

[hyperman1]

First time I tried Klarna, their 'payment' workflow was actually a 'grant full access to all bank accounts' workflow in disguise. I was thinking this amount of misleading must be illegal. Further interactions with them always felt sleazy.

Maybe they know the regulators will dismantle the company in the near future and are optimizing for extracting the maximum before their implosion?

[asmor]

Almost like PSD2's open banking part was a huge mistake. I love how my banks, payment providers and random financial apps can now ask for unscoped access, without any way to figure out what I have authorized in the past, what's still pulling my data and how I can revoke any of it.

Most OAuth providers have better transparency and control.

[ManuelKiessling]

FWIW, after I gave Klarna a sneak peek into my banking account several years ago, I did a GDPR/DSGVO information request a few days later, and according to that, they did not store the transactions they had access to.

Not sure if the information was truthful, of course.

[iforgotpassword]

Yeah, I don't see why anyone with a bit of technical knowledge would use that over PayPal. I mean I'm all for destroying those evil ultra capitalist US corps but unfortunately our European counterparts are just complete rubbish more often than not.

If you don't offer wire transfer or PayPal, you lost me as a customer.

[ablation]

Nearly every CEO I’ve talked to in the past three months (only a handful, admittedly) has said something along these lines, if not quite as extreme. They genuinely believed the current state of the art is polished and powerful enough to replace huge swathes of coders, designers, writers, etc. leaving only a middle-management supervisory layer and some lower-level grunts to herd the bots. Or it’s a good PR ruse to scale back growth ambitions as others have stated. But most of it appeared genuine belief in “AI”.

Some of these companies will not survive the inevitable reality check that is coming. I’m only sad for the people the glassy-eyed CEOs are shitcanning.

[solidasparagus]

For some subset I am certain AI is just the latest excuse to justify bad existing business practices. Much safer to say the world has changed due to AI and that's why you're changing your hiring plan instead of "our plan was bad and we dramatically overhired and misjudged the post-covid world"

[rapsey]

Sounds like 20 years ago when everyone was moving IT to India.

[emseetech]

I'm open to the idea they see something I don't.

I'm not convinced, but I'm open to it.

[gyre007]

The most ironic thing is thar the middle managers are somehow surviving this. So far, anyway, but I think they’ll be found too sooner or latet

[tossandthrow]

Assume they succeed, what's worth to be a ceo for?

They would end up as a frat startup with 5 people all with a CxO position but no organisation.

I am sure these CEOs are more power hungry than that.

[blackeyeblitzar]

Some will not survive their customers abandoning them. Think about the typical automated voice response on a customer service line. Imagine that becoming far more pervasive. And it slowing you down and becoming a barrier while you desperately try to get help with your insurance claim or mortgage or whatever. It’ll be absolutely awful and companies that built trustworthy services with humans who pick up the phone will stand out even more easily. Or that’s what I hope.

[suraci]

I'm confused about why there are so many managers/CEOs who mythologize AI.

Some of them use AI as an excuse for layoffs, but many of them do believe that AI (or ChatGPT, specifically) is some kind of magic that can make (1 employee + ChatGPT) equal to 3 employees.

I mean, they must have used ChatGPT, right? How does ChatGPT give them the conclusion about this?

[rstuart4133]

> They genuinely believed the current state of the art is polished and powerful enough to replace huge swathes of coders, designers, writers, etc.

They already have replaced designers and writers. It probably seems reasonable they could replace other jobs very soon, if your knowledge is superficial and you're just reading marketing brochures.

The reality AI's are confidently wrong. Where that doesn't matter they already cut swathes through the workforce. Where it does they haven't made much progress so far.

Yet, I saw a post from someone here saying they were a web programmer who didn't know javascript. They just prompted the AI until it produced something that worked. Them calling themselves a "web programmer" seemed like a stretch to me, and I'm sceptical about them tackling anything but cookie cutter work the AI has already seen a lot of, but that's clearly the direction copilot and it's ilk are headed. Currently, they look like they might soon succeed at using RAG to produce a better grep, so they have a little ways to go yet. I find checking the code written AI's to be more effort than it's work primarily because if I have to understand the code anyway, it's easier if I write it. But maybe that will change. One day. Right now this constant checking of AI's output is a huge time sink.

But there is class of jobs that continually have humans checking their output and giving corrections. That is ... managers. Even CEO's. Maybe the future jobs of board is to select the right AI to be the CEO, and the future of the human workforce is to be prompt engineers for that AI CEO. My guess is AI's will be replacing managers and CEO's before they make a serious dent on STEM jobs.

[naijaboiler]

Congratulations, you have found a bunch of CEOs that are going to be jobless in a few years after leading their companies down the wrong direction

[camillomiller]

If they are all CEOs like the Klarna one, that make sense. Just look up how well Klarna is doing under his tenure.

[misswaterfairy]

Hot take: this will eventually be the downfall of AI/burst the AI bubble, when businesses all over finally realise that 'AI-ing' their workforce was a mistake that cost them dearly, and need to re-employ almost the same number of staff to do what they're in business for.

One hopes at least, anyway...

[downrightmike]

They're going to get rolled when the script kiddies figure out how to drain the corporate bank accounts by starting the chat asking to disregard all previous instructions...

[woodpanel]

> glassy-eyed CEOs

We've been here before: From componanies throwing millions at rebuilding their content-website as IOS app, showing off their crypto or low-code "RnD" or car manufacturers going full-BEVs, Karl Marx's axiom that "social existence determines consciousness" seems to be vindicated with this fad as well.

[lazide]

There is massive burnout in the industry, was massive over hiring, etc. and folks are trying to keep numbers going up and to the right somehow even when the economy is not helping.

AI gives them a smokescreen, gives them fear/uncertainty they can use as leverage over their workforce, and sometimes can help efficiency (but usually not, if you factor in any element of quality - which usually they can get away with ignoring at first).

[iforgotpassword]

Final problem being, as usual, if your product is already running and not a complete shit show, it will take some time to see how you messed up, maybe even when the ceo/decision maker already moved on to another company, so it's someone else's fault. Twitter fired how many engineers and still runs the same from an outside view...

[paradite]

I'm a software engineer with 7 years of experience.

I've built products used by millions of users, I've built ML models and AI coding tools, and I've been using AI to generate 70% of code that's shipped to production in the last few months.

I do believe that we can replace a large percentage of software engineers with AI in the next 3 years (2025-2027).

Also this 1 million dollar Kaggle competition on AI coding just launched: https://www.kaggle.com/competitions/konwinski-prize

[bananadonkey]

> Though Klarna's website is advertising open positions at the time of writing, a spokesperson told Business Insider the company wasn't "actively recruiting" to expand its workforce. Rather, the spokesperson said, Klarna is backfilling "some essential roles," primarily in engineering.

[Aurornis]

Translation: Klarna is not growing and they needed a good excuse.

[acyou]

Net income -2.5 billion kr (2023)

Good thing they aren't growing, they appear to have scaled those negative margins, and it's time to dial it back.

Will AI also be able to hyperscale a negative margin business?

[jamil7]

Was it ever a good place to work? When they opened their Berlin office the word was the mobile team was a revolving door of contractors doing append-only development on a monolithic RN app. It already seemed dysfunctional then.

[ablation]

For a buy-now-pay-later business, it has aggressive narrative-shaping PR that seeks to paint it as something more. And most tech news outlets seems to regurgitate it willingly.

[myaccountonhn]

The joke in the Swedish tech scene was that you work there until you graduate to Spotify.

[orlp]

I'd suggest him to lead by example and fire himself.

[duskwuff]

The implied message of "once we figure out how to automate your job, we'll fire you and replace you with AI as well" has got to be great for employee morale.

[buryat]

I'm stopping using services that use AI for call centers, I much rather talk to a real person and know that they can handle any kind of situation. So I'm going to bring money to the businesses that employ real human beings

[ilrwbwrkhv]

Lol Klarna is not even a real company. They were a classic zirp company. Sell 100 dollars for 80 dollars.

[tokioyoyo]

Isn't it because they're trying to IPO out, so trying to make a bullish case for themselves?

[bags43]

And this is additional reason why I would never use their services.

[jansan]

Of all the payment options Klarna always struck me as one of the less trustworthy ones.

IIRC they are one of those services who basically want access to my bank account, from where they could read my account balance. I think this is something even regulated by the EU, but why on earth should someone agree to that?

[ks2048]

Looks like it worked - make a controversial statement and now a lot of people have heard of your company.

[LtWorf]

It's a rather famous scummy company in sweden.

Basically digital loan sharks.

[aitchnyu]

Is there any serious document/person on how many jobs were lost to AI? So far the headlines have been from CEOs playing with Other Peoples Money (fellow comment stating 1 of 76 quarters were profitable), giant consulting orgs etc.

[ahartmetz]

It's one of these banks that is like "Choose us because we have an app and emojis". Yeah no thanks, I want a bank that knows how to bank first and foremost.

[28304283409234]

Their AI forgot to update their jobs page then. https://klarnagroup.teamtailor.com/jobs