What happened
Klarna, the Swedish buy-now-pay-later firm, had said its AI assistant could do the work of 700 human agents, and CEO Sebastian Siemiatkowski had boasted of not hiring a human for a year. In September 2025 The Economic Times, citing Business Insider and Bloomberg, reported the plan had reversed: by mid-2025 customers were frustrated and call volumes were piling up.
Klarna began redeploying employees from other departments into support. Business Insider reported that engineers and marketers had been told to take frontline service roles, some from a holding 'talent pool' of staff whose jobs had been eliminated. In an interview with Bloomberg, Siemiatkowski said over-prioritising cost 'ended up lowering quality' and that investing in the quality of human support was 'the way of the future'.
The reversal came as Klarna prepared a US IPO at a valuation of about $14 billion. Analysts quoted in the report said forcing highly trained engineers into call centres could signal disarray before the listing, and the article placed the episode in a wider pattern of AI projects failing to deliver returns.
Why it happened
Klarna cut the human support department first, on the assumption the AI assistant could absorb the work.
Complaints rose as the assistant failed to handle them, leaving no spare human capacity.
The CEO said the push to cut costs was prioritised over service quality.
The lesson
Replacing a service team with a chatbot before the bot can handle complaints at volume pushes the cost back onto the staff you meant to keep. Keep a human route until the bot is proven.
Aftermath
Siemiatkowski pledged to restore human support. The ET report, which relies on Business Insider and Bloomberg rather than a Klarna filing, gives no figures on lost customers or cost. It mentions a MIT study saying 95% of generative-AI integrations produce no financial return, and notes that McDonald's and Starbucks also rolled back automation. Some staff described the redeployments as a quiet layoff strategy.
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