Klarna, AI allows us to slash thousands of employees but pay extra.
Klarna, a buy-now, pay-later company, plans to let off nearly half of its staff members in the next years due to efficiency resulting from its investment in artificial intelligence (AI). The company has already reduced its personnel from 5,000 to 3,800 in the last year and aims to lower it to 2,000 by implementing AI in marketing and customer support.
Boss Sebastian Siemiatkowski told the media that the job reduction will allow Klarna to pay its remaining employees more. However, he stated that the government must consider how to address AI, which he anticipated would have "a significant impact" on jobs and community.
"I believe politicians should consider whether there are other effective ways to support people," he told BBC Radio 4's Today programme. He believed it was "too simplistic" to merely state that new opportunities would be produced in the future. "I mean, probably you can become a celebrity influencer, but it's difficult to do so if you are 55-years-old," he told me. The increasing growth of AI has brought its advantages and hazards to the forefront.
Earlier this year, the International Monetary Fund, or IMF, (IMF) predicted that AI would affect roughly 40% of the workforce and "probably worsen overall inequity". In other industries, such as gaming, experts have warned that they are already losing jobs to AI.
Union worries
Klarna, which is headquartered in Sweden and has two operations in the United Kingdom, announced employment cuts alongside preliminary findings that showed a 27% growth in revenue to 13.3 billion Swedish krona (£990 million). "Our demonstrated efficiency of scale have been boosted by our investment in AI, which has pushed down operational costs and increased gross profits," according to the statement.
It occurs as organizations warn of massive job losses as AI grows, and they ask for laws to protect workers. Mr Siemiatkowski stated that Klarna would shrink its employment through "natural attrition" - essentially a recruiting freeze in which employees are not replaced after leaving. Typically, this means that the personnel who remain face a higher task. However, Mr Siemiatkowski argued that AI will replace this labor and even suggested that it may be a "positive development" for some people who would be rewarded extra.
While he stated that it was "essential" for the authorities to determine what to do about those who had lost their employment, he also argued that there was no "stopping growth" for businesses like his. "It's essential that Europe and democracies are ahead in the development of AI," said Mr. Putin. Klarna is said to be reducing its workforce in preparation for a public offering on the stock market, which has recently been controlled by corporations significantly invested in AI, such as Nvidia and Microsoft. This means that Klarna's status as a strong supporter of the technology may make its shares more appealing to investors when it eventually goes public.
