The Big Rethink: Klarna CEO admits company shifted from AI cost-cutting after $15B IPO

Klarna’s CEO Sebastian Siemiatkowski admitted the Swedish fintech company moved too aggressively with AI implementation, prioritizing cost-cutting over service improvements after raising $1.37 billion in its U.S. IPO. The admission comes as the buy-now-pay-later lender, valued at $15 billion, shifts its AI strategy toward enhancing customer and merchant experiences rather than simply reducing operational expenses.

What you should know: Klarna has spent the last six months course-correcting its AI approach after recognizing it “over indexed” on cost reduction.

• The company cut its workforce from 5,000 to 3,800 employees last year, with AI chatbots handling customer queries that previously required 700 staff members.
• Average resolution times dropped from 11 minutes to just two minutes through AI automation.
• Klarna dropped Salesforce software in favor of AI-built data tools, saving approximately $2 million.

The big picture: The fintech’s experience illustrates the challenges companies face when implementing AI at scale, highlighting the tension between efficiency gains and service quality.

• Klarna became one of Europe’s early AI adopters, using the technology for marketing campaigns and customer service automation.
• The company even created an AI avatar of Siemiatkowski to present quarterly earnings and launched a customer hotline featuring an interactive AI trained on the CEO’s voice and experiences.
• Despite aggressive AI implementation, the company is now hiring again with over two dozen open positions.

What they’re saying: Siemiatkowski acknowledged that cost savings alone won’t satisfy investors looking for growth.

• “My investors are not going to be cheering, they’re going to look for growth, and they’re going to look to what we offer our customers and how that’s doing,” he said.
• Chief Financial Officer Niclas Neglen emphasized AI’s potential beyond cost reduction: “That’s definitely not just a cost play… it’s going to be a lot more than that, and it’s going to be able to help us provide better services to consumers and merchants over time.”

Why this matters: Klarna’s pivot reflects broader industry lessons about sustainable AI implementation, particularly for fintech companies competing in the U.S. market against players like Affirm, a rival buy-now-pay-later service.

• The company’s IPO represents the biggest Swedish listing since Spotify, setting potential trends for high-growth fintech offerings.
• The shift from cost-focused to service-focused AI deployment could influence how other companies approach their own AI transformations.