Klarna Reverses AI Workforce Strategy Seeks to Rehire Human Employees

Two years after partnering with OpenAI to automate marketing and customer service roles, Swedish fintech company Klarna is now planning a major recruitment drive. The company, which had aggressively replaced human workers with AI, admitted that its AI customer service agents fell short of expectations.

From AI Enthusiasm to Regret

Klarna CEO Sebastian Siemiatkowski once championed AI as capable of replacing all human jobs, even halting new hires in 2023 and reducing its workforce by 22%. The company proudly reported cost savings, including $10 million in marketing expenses and the equivalent of 700 full-time agents through automation.

However, Siemiatkowski now admits that prioritizing cost over quality led to poor customer experiences. "From a brand perspective, it’s critical that customers always have the option to speak to a human," he told Bloomberg.

Wider Industry Trends

Klarna isn’t alone in its AI missteps. Surveys reveal growing dissatisfaction among executives:

• 66% of business leaders expressed ambivalence or disappointment with AI progress (BCG report).
• 55% of UK businesses regretted replacing workers with AI (TechRadar).

A Carnegie Mellon University experiment further highlighted AI's limitations, with AI "employees" completing just 24% of assigned tasks.

The Future of AI and Labor

While AI continues to disrupt industries like news media and fast food, Klarna’s reversal signals a broader reckoning. As Siemiatkowski put it, "Cost was too dominant a factor—what you end up with is lower quality."

Related: Dystopia Intensifies as Startup Offers Micro-Loans for Fast Food