Klarna Aims To Halve Workforce With AI-Driven Gains (ft.com) 49
Klarna aims to extend AI-driven cuts to its workforce with plans to axe almost half of its staff [non-paywalled source], as the lossmaking Swedish buy now, pay later company gears up for a stock market flotation. FT: Chief executive Sebastian Siemiatkowski heralded the benefits of AI in Klarna's second-quarter results on Tuesday, which showed a significant narrowing of its net loss from SKr854mn ($84mn) a year earlier to SKr10mn. The Swedish fintech has already cut its workforce from 5,000 to 3,800 in the past year. Siemiatkowski told the Financial Times that Klarna could employ as few as 2,000 employees in the coming years as it uses AI in tasks such as customer service and marketing.
"Not only can we do more with less, but we can do much more with less. Internally, we speak directionally about 2,000 [employees]. We don't want to put a specific deadline on that," he added. Klarna has imposed a hiring freeze on workers apart from engineers and is using natural attrition rather than lay-offs to shrink its workforce. Siemiatkowski has become one of the most outspoken European tech bosses about the benefits of AI, even if it leads to lower employment, arguing that is an issue for governments to worry about. The Stockholm-based group is lining up financial advisers for its long-anticipated initial public offering -- due as early as the first half of next year -- with Morgan Stanley, JPMorgan Chase and Goldman Sachs in lead positions to secure top roles, people familiar with the matter have previously told the FT.
"Not only can we do more with less, but we can do much more with less. Internally, we speak directionally about 2,000 [employees]. We don't want to put a specific deadline on that," he added. Klarna has imposed a hiring freeze on workers apart from engineers and is using natural attrition rather than lay-offs to shrink its workforce. Siemiatkowski has become one of the most outspoken European tech bosses about the benefits of AI, even if it leads to lower employment, arguing that is an issue for governments to worry about. The Stockholm-based group is lining up financial advisers for its long-anticipated initial public offering -- due as early as the first half of next year -- with Morgan Stanley, JPMorgan Chase and Goldman Sachs in lead positions to secure top roles, people familiar with the matter have previously told the FT.
Sure go ahead and put all CS in the hands of AI (Score:2)
Right now it just looks like pump & dump (Score:4, Informative)
The problem is there's nothing on tap to replace those programmers like how punch card feeders could go into rank & file programming with a bit of training.
And if you think you're safe because you're not a rank & file programmers, those millions of guys put out of work aren't just gonna eat a bullet or go work at McDonalds. They're gonna start gunning for your job. A lot of them are actually damn good coders who are just kinda lazy and taking it easy. But when push comes to shove and it's the difference between homelessness and employment some of 'em will step up, and supply + Demand cuts both ways.
We're all about to take a *big* pay cut unless we do something about it, and by "something" I don't me "grind harder". This isn't something you can "hard work" your way out of.
Re: (Score:2)
Instead of forcing everyone else to make your life easy, adapt. The world needs lots of builders, that's what I'm planning on learning next.
Re: (Score:2)
I'll worry about AI coming for my software job (because it can replace rank & file) when AI comes for my 4x grand strategy games like Civ.
Eg, until harder difficulty levels are not "give the AI ridiculous bonuses so it can (kinda) compete against a human" I'm not too worried about my job.
Re: (Score:2)
I think it's pretty safe to say that large numbers of programmers are going to be replaced.
Maybe, but not by AI. The sad truth is that most development teams are way too large and that size ultimately hinders productivity.
We've all read Brooks. We've known this for a while, but too many of us would rather protect our paychecks than advance the industry in a sensible way. I'm increasingly convinced that the only reason Agile is so popular is that it allows oversized teams to look productive while building horrific unmaintainable monstrosities. Naturally, we also have tools that make it easier
Re: (Score:2)
Well, I can assure you, the job that keeps paying me money is more important then the "Industry". A lot of the world works that way. We do lots of shit to look busy instead of being busy. I think this boils down to the owners stiff us on the gains of productivity so why bother being overly productive when you won't get anything out of it anyway.
Re: (Score:2)
>I think it's pretty safe to say that large numbers of programmers are going to be replaced
On what timeframe? If you think it's any time soon ... well, I have this amazing bridge in Brooklyn that I just happen to own, but I really need some cash right now ...
Look, throughout history automation has *ALWAYS* replaced unskilled workers, not skilled ones. Programmers are knowledge workers: our jobs are going to be some of the last ones the robots come from.
Re: (Score:2)
20% boost in productivity means they can fire 1 in 5 workers.
Re: (Score:2)
Programmers will stay safer longer then most other knowledge workers because you are puzzle solvers. A lot of knowledge workers are not puzzle solvers but really just regurgitators. If you load all their knowledge into a new fancy AI chatbot, and it's actually correct (we'll get there eventually, especially on bots that are specialized), then you just lost a lot of human jobs but kept all the productivity.
This wouldn't be a bad thing if we were more fair in resource distribution but that's not how humans op
Re: (Score:2)
Why are you bringing coding (not computer science) into it?
Re: (Score:2)
I already work retail, so if you want my job, come get it. As you said though, you won't. It's beneath to many people to work public facing jobs. Ironically, it's really not a bad job, especially my particular gig as a union grocery worker.
Yes, I could make more in tech and actually am in school right now working towards an associates, getting some certs and hopefully can get my foot in the door to start building my experience in that industry.
Still, laid off programmers aren't coming for my job though it w
All aboard the hype train (Score:5, Insightful)
As I read it, a crappy company, selling a useless product, tries to use the magic buzzword to fool investors ahead of its IPO
I predict that some form of AI will eventually be useful for some things, but this kind of silliness will continue to proliferate as long as there are suckers to fleece
Re: (Score:2)
When the fit hits the shan (Score:1)
It's going to be interesting when investors start to sue over this common gambit when they see continued revenue shrinkage. In court the executives are going to have to justify "but we thought the AI was working fine", and the engineers laugh, "see, I told them in this email it's not as smart as our brochures claim."
Re: (Score:2)
I predict that some form of AI will eventually be useful for some things, but this kind of silliness will continue to proliferate as long as there are suckers to fleece
You realize that they're using AI to replace employees in "tasks such as customer service and marketing", right?
Have you interacted with employees in either of those fields recently? It's generally not their fault, but the abysmal job they're doing is pretty easy to match or even improve on. And LLMs are especially well suited to producing the kind of stuff that counts as passable in those fields.
People here on Slashdot have an incredibly overinflated idea of the average human employee performance and outpu
Re: (Score:2)
Re: (Score:2)
I think you are 100% correct but it doesn't have to be this way. Sadly, we're just not that altruistic of a species to share our resources with each other in a more fair manner.
Re: (Score:2)
That nicely sums it up. All the previous AI hypes eventually had some useful results, but they all never delivered on any of their grande claims. This one will not be different.
Re: (Score:2)
That's basically how marketing works. Over promise, under deliver. We basically let them lie to our faces and their never seems to be any repercussions for it.
Re: (Score:2)
Yes. But this time a lot of enterprises have fallen for it. Nobody of the big spenders will even begin to recover their investments.
As to repercussions, I think that software and advertising needs full liability for the claims made and no possibility to relativize in the fine print.
Funny how San Altman and Satya Nadella promised (Score:5, Insightful)
more creative time for employees and machine assistants to help then work more efficiently, and all I see is massive wave after massive wave of layoffs. It's almost as if they lied to us...
Re: (Score:2)
And the promise after promise that AI won't cost anyone their job.
And yet here we are with surprised Pikachu faces.
Re: (Score:2)
"And the promise after promise that AI won't cost anyone their job."
You need to get your hearing checked. Nobody has ever promised that. What's been said is that AI, like any technological advancement, will cost jobs, but create more. Automobiles cost a lot of buggy-whip makers their jobs, but in the end, many more jobs were created.
Re: (Score:2)
AI, like any technological advancement, will cost jobs, but create more
It won't work like that this time around: the job cuts will be so sweeping and so deep that a staggering percentage of the workforce worldwide will very suddenly find itself jobless. This will bankrupt all social security systems and create poverty the world over.
And guess what: those companies that saved a ton of money with AI won't have anybody to sell their wares to anymore because nobody will have any money. So they'll lay off even more people and/or they'll tank eventually anyway.
If AI create more jobs
Re: (Score:2)
Anyone who thinks this change is going to be "sudden" or "sweeping" or "deep" is drinking the AI hype Kool-Aid. It is anything but easy to make AI tools that will actually save time and allow companies to lay off significant numbers of workers. This is the same technology that IBM used to beat Jeopardy in 2010. Why, 14 years later, has AI still not cost millions of jobs? The answer is, because it's not as easy as it looks.
If you actually use tools like GitHub Copilot or other AI tools, you'll quickly see th
Re: (Score:2)
Anyone who thinks this change is going to be "sudden" or "sweeping" or "deep" is drinking the AI hype Kool-Aid.
Tell that to the millions of professional drivers - truckers, cabbies and such - who are only years away from getting the sack.
As for tech workers, seasoned professionals may be safer than most - and from what you write, I take it you are one - but junior programmers are already very close to unemployable today. And without junior programmers, there won't be very many senior programmers in a few years.
If you're not immediately in the line of fire, I'm glad for you. But don't kid yourself, it's coming for a
Re: (Score:2)
Oh my, the sky really is falling!
No, it's not.
Come back to me about the truckers when those millions of truckers are actually unemployed. We've had self-driving technology for a couple of decades already. It's taking a long time to perfect, and it's extremely expensive. We're not going to suddenly go from "almost there" to "unemployed truckers by the millions." I mean, look how hard it's been to switch to EVs, and EV technology existed in the 1800s!
The McDonald's where my teenage son worked, had an automati
Re: (Score:2)
This is pretty much exactly what I think will happen unless we some how vastly expand our social nets, which I don't think we will do. Even if we do that, we'll all still be living in poverty unless we have family wealth.
Re: (Score:2)
Re: (Score:2)
Re: (Score:2)
Re: (Score:2)
You go do that. Personally, I'm riding this wave, and enjoying it. My job as a developer is getting easier because of AI, but not by leaps and bounds...this is an incremental improvement, not a massive, earth-changing one.
Re: (Score:2)
This isn't AI taking jobs. This is a failing company claiming that they'll use AI to replace developers so that they can cut staff ahead of an IPO and pretend it isn't because they're a failing company.
Re: (Score:2)
They're loss making. I'm sure a heavy investment into a brand new, experimental tech of mixed reliability and uncertain outcomes will save them and make them profitable. It's a good job the programmers with the AI expertise needed to do this are cheaper than the regular sort who make their product.
Re: (Score:2)
This company was already doing massive rounds of layoffs. This isn't AI, this is just marketing spin to make the company seem less badly-managed than it is.
Re: (Score:2)
more creative time for employees and machine assistants to help then work more efficiently, and all I see is massive wave after massive wave of layoffs. It's almost as if they lied to us...
I suspect there will be quite a bit of work to fix everything the AI replacing the humans does wrong.
Re: (Score:2)
Re: (Score:2)
If you read the summary, you'll see that the company has already cut their staff by 25% in that past year. Was that due to AI too? I doubt it.
This is nothing more than a sinking company trying to put a positive spin on their financial troubles, blaming their layoffs (which would have happened anyway) on AI.
Re: Funny how San Altman and Satya Nadella promise (Score:1)
I hope this fails and they go under (Score:5, Interesting)
They are the payment option with absolutely worst privacy track record. At one point they had a leakage where just by typing in someone's email address you could get all their details without any kind of authentication.
The way it worked was that you purchased from a webshop and entered your details for delivery and payment, paying by credit card. Payment processor was Klarna. They got your email and home address.
Then anyone could go to another webshop that offered Klarna directly as a payment option (Buy now, pay later) alongside credit cards. Click on that. Enter an e-mail address - anyone's email address. If they have purchased something at any other site where payment was processed by Klarna, bang, instant info.
This happened like back in 2015 but ever since then there has been lots of smaller leaks.
I hope they die in a fire.
Re: (Score:2)
It's the new in thing. Shopify sites do the same thing. I bought a chair from one company and a week later went to another and as soon as I put the mail address the payment information was all filled in. I complained to my bank but they said that this is a VISA agreement. It's apparently the new thing. Stupid if you ask me.
Re: (Score:2)
Most likely, it will. They've already laid off 25% of their staff. This AI thing is just marketing to try to convince future shareholders that they aren't dying. The layoffs would have likely come anyway, now they can just say "This is all part of the plan!"
Klarna lacks patents or unique IP (Score:2)
Translation: (Score:4, Insightful)
"We're laying off staff because we suck and are shrinking, but claim it's because of AI replacing them to fool investors."
A common f$cking tactic from losers.
Re: (Score:2)
Precisely the case. And I say that as a fan and daily user of AI tools.
That bite on the ass will hurt bad (Score:2)
this is good ultimately (Score:3)
"an issue for governments to worry about"
What a complete a$$hat. But yeah, most private costs will eventually be passed on to the public, while at the same time public money will be passed on to private bank accounts.
At least food will be cheap for the workers, because they'll just make people into food if they can't otherwise provide value to shareholders.
AI not required for bad companies (Score:2)
If a bad, money-losing company wants to cut expenses, it doesn't need AI to justify cutting workers. All it has to do is ... cut workers.
A good use of AI would be increasing productivity and profits, leading to expansion and hiring more workers.