Sebastian Siemiatkowski was only 23 years old when he founded Klarna in 2005.
Klarna has frozen recruitment and plans to reduce the staff of its head. Executives are betting that more jobs in the future will be performed by artificial intelligence (AI).
Sebastian Siemäjatkowski said the Swedish buy now, pay later giant will no longer hire new staff outside its engineering department, predicting that AI will allow it to reduce the number of employees in the business.
“The company will downsize “said Mr. Semenyatkovsky, explaining this widespread use of tools such as ChatGPT. “Currently we are not hiring at all, with the exception of engineers.”
The hiring freeze at one of Europe's biggest tech companies comes 18 months after it laid off hundreds of staff during the deep tech downturn.
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Semiatkowski, however, insisted the decision to hire only engineers was motivated by his faith into the potential of AI, rather than a reflection of business fundamentals.
Klarna recently posted its first quarterly profit in four years and is preparing for an IPO expected next year.
Siemiatkovsky, 42, told The Telegraph: “Things that used to take up a lot of people’s time. can be done much faster and much shorter, and we need fewer people to do the same thing. The most correct thing would be to simply say: “Let's not recruit employees now, let's see how this ends.”
Klarna does not plan layoffs. However, Mr Siemiatkowski said people leaving voluntarily meant he expected the company's size to shrink over time.
He said AI was a “threat to many jobs” across the economy .
Klarna, which has more than 5,000 employees, has been enthusiastic about using ChatGPT, a chatbot tool developed by San Francisco-based artificial intelligence startup OpenAI.
This technology is used to quickly analyze customer service records and automate order disputes between buyers and sellers.
Mr Siemiatkowski said he hoped to add more consumer-facing artificial intelligence features to Klarna's financial app, hoping it would help him take a step towards becoming a “personal finance assistant”.
The adoption of artificial intelligence comes as Klarna prepares. for a long-awaited stock market float that could be worth up to $15bn (£12bn).
Mr Siemiatkowski said the Stockholm-based company had not yet decided where to list, saying London was “definitely on the agenda”.
However, he said UK and European stock markets were continue to lag significantly behind Wall Street markets.
He called for the creation of a pan-European network of stock markets that would improve the pool of capital for large listings.
“The advantage of US markets is the enormous liquidity, quantity companies and type of stock markets. the pool of investors that exists in these markets. And this is difficult to overcome.
“Maybe you can create an internal trading system. You can allow people to list shares on any of the local stock markets, but ensure that if you are registered on one, you can trade on all of them. Then you really suddenly reach a market size that allows you to make it more attractive.”
His proposal echoes that of European Central Bank chief Christine Lagarde, who last month called for a pan-European stock exchange to help the region compete.
Klarna is best known in the UK for its buy now, pay later credit service , which offers short-term interest-free loans for online and offline purchases. The product has proven extremely popular, especially among younger shoppers, but has been repeatedly criticized for allegedly dragging people into debt by encouraging spending.
Klarna has come under fire for encouraging people to spend beyond their means. Photo: Robert Evans/Alamy Stock Photo
Mr Siemieniatkowski said Klarna loans were a fairer and more sustainable alternative to credit cards and outlined his ambitions for the company. much wider.
The company has a banking license in the EU, offers bank accounts in Germany and is widely used for online payments, rather than deferred payments, in its country.
The listing will mark the end of an eventful and at times turbulent process. several years for the business.
In 2021, a $639 million investment round led by tech investment giant SoftBank valued Klarna at $46 billion, making it Europe's most valuable startup and turning Mr. Siemiatkowski into paper billionaire. .
By July 2022, soaring interest rates meant the easy money had dried up. Klarna was forced to secure new funding at a valuation of $6.5 billion (an 85% reduction) and refocus on profitability. Last year the company announced job cuts, including staff reductions that affected one in 10 employees.
Mr. Siemiatkovsky responded to the recent problems with the easy matter-of-factness of a man who lives for the long term. < /p>
“I have already worked with this company several times. This obviously gives you at least a little more confidence that “this too shall pass.”
A teenage Polish immigrant to Sweden, Mr. Siemiatkowski met one of his co-founders while working at Burger King and opened Klarna in Stockholm in 2005.
“Personally, I always wanted to build a restaurant a $100 billion dollar company, a trillion dollar company, and I still want to do it and I still see the opportunity there.”
Revenue in the third quarter of the year rose 30% to 6 billion kroner (£454 million), and Klarna had an operating profit of 130 million kroner. Importantly, the company signs deals with retailers such as Airbnb and German fashion giant Zalando, who pay Klarna a marketing fee to attract customers.
America has become the company's largest market by number of customers, suggesting it is expanding its operations. That compares favorably with U.S. rivals Affirm and Apple, which launched deferred payment services earlier this year.
The picture in the UK was less clear. The Treasury is consulting on legislation that would bring buy now, pay later providers under the watchful eye of the Financial Conduct Authority, meaning requirements relating to credit checks and marketing. However, industry sources believe the law has been quietly shelved.
Mr. Siemiatkovsky described himself as a free-market supporter, but said the company supported regulation: “I'm not a big supporter of anarchy. I don't think that's a good way to run a society.”
However, he cautioned against prescriptive rules, arguing that what he sees as the great evil – credit cards – ends up being much worse for consumers, despite that they are regulated.
Mr Siemiatkowski lobbied for Boris Johnson's rules, and this was an attempt. It may have been in vain now, but he described the current government as “very business-oriented… it has done a lot of smart things.”
He said: “The UK is definitely the financial center of the world.” and continues to be so,” suggesting that his love for the UK may be the result of a recent DNA test which revealed he is 30% British.
In the next six months, the company intends to take the first steps towards launching a personal financial assistant, driven by artificial intelligence, which can automate and offer more effective financial solutions.
Mr Siemiatkovsky believes that this is what will shape the future. growth at Klarna and will shake up the banking industry.
He said: “A digital assistant will be able to renegotiate the terms of your mortgage on your behalf. This means that on a macroeconomic level, all the excess profits that existed in this industry will disappear.
“If this is the future, it means that the market will be smaller, but Klarna, if we do a good job, we will be able to participate in this transformation and get more market share for a smaller pie.”
Mr Siemiatkowski is close to leading Klarna for two decades, but said he wants to be “here for a few more decades.”< /p>
“I did not fully understand the complexity of the task that I took on 20 years ago,” admitted Mr. Siemiatkovsky. “[If I did] I would probably choose a slightly simpler industry.”
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