Klarna improves profits as AI takes over jobs

Artificial intelligence is taking over jobs at Klarna (KLAR), with the Swedish buy now, pay later company expecting a further reduction in its workforce as the new technology helps it cut costs and improve profits.

Klarna (KLAR) said its AI assistant performs the work of 700 employees, reducing the average resolution time from 11 minutes to just two.

This has driven a 73% increase in average revenue per employee to SEK 7M ($688,058) in the first half of the year from SEK 4M ($393,176) in the year-ago period.

Klarna (KLAR) has already reduced its workforce from 5,000 to 3,800 in the past year. “Not only can we do more with less, but we can do much more with less,” CEO Sebastian Siemiatkowski told the Financial Times. “Internally, we speak directionally about 2,000 (employees). We don’t want to put a specific deadline on that.”

The company, which already has a hiring freeze in place for workers other than engineers, is relying on natural attrition rather than layoffs to reduce its workforce.

Klarna (KLAR) is working on a U.S. initial public offering, which could happen in the first quarter of next year. Siemiatkowski declined to comment on the IPO plans. “We have not yet taken any decisions. It will happen in due course.”