May 21, 2024
Klarna freezes hiring, citing AI ‘productivity gains’



In a hiring freeze that CEO Sebastian Siemiatkowski attributes to the rise of AI, Swedish fintech unicorn Klarna is no longer recruiting staff beyond its engineering department.

“There will be a shrinking of the company,” Siemiatkowski told the Telegraph. “We’re not currently hiring at all, apart from engineers.”

The chief exec of the buy now, pay later app said that the productivity gains from using tools like ChatGPT meant the company now needs “fewer people to do the same thing.”

Klarna is not planning layoffs. But as people depart voluntarily, the CEO said he expects the size of the company to shrink over time. AI is “a threat to a lot of jobs” across the economy, he added.

The news comes as employees — from writers to artists — are becoming increasingly worried about the impact that AI could have on their livelihoods. Comments like these from the Klarna boss will no doubt exacerbate these anxieties. 

Klarna isn’t the first to make such moves either, and surely not the last. In May, the CEO of IBM told Bloomberg that the company was pausing hiring for roles that it believed could be replaced by AI in coming years. While in April, Dropbox announced it was slicing its workforce by 16%, or 500 employees, blaming AI for forcing a shift in strategies.   

Elon Musk, for one, thinks that AI will replace all jobs in the future. However, some believe AI won’t replace jobs, but simply make us more productive at what we already do, while a few think it will create more jobs.

Whatever your stance, the reality is that big tech companies across the world are implementing hiring freezes or laying off employees at a worrying rate — for reasons pertaining to AI or other matters.

Just today, Spotify, another Swedish tech giant, announced that it will lay off around 1,500 employees, or 17% of its workforce, to bring down costs.



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