Klarna’s grand AI experiment has hit a wall. After aggressively replacing human workers with artificial intelligence, the company is now reversing course, admitting that AI-driven customer service failed to meet expectations. CEO Sebastian Siemiatkowski, once a vocal advocate for AI automation, now acknowledges that quality suffered, forcing Klarna to bring back human employees.
The fintech giant initially embraced AI as a cost-cutting measure, slashing its workforce from 5,000 to 2,000 in just two years. AI chatbots were deployed to handle two-thirds of customer service interactions, with executives boasting that the technology was performing the work of 700 employees. The reality was far less impressive. Customers grew frustrated with robotic responses, and Klarna’s reputation took a hit.
Siemiatkowski now admits that cost-cutting overshadowed service quality, leading to poor customer experiences. The company is hiring again, ensuring that customers will always have the option to speak to a human. Klarna’s new approach involves remote-based customer service representatives, structured in an Uber-style setup targeting students and rural workers.
The reversal highlights a broader trend. Businesses rushing to replace human workers with AI are discovering that automation isn’t always the answer. A recent IBM survey found that only 25% of AI projects deliver the expected return on investment, with many failing to scale effectively. Klarna’s experience serves as a cautionary tale, proving that human expertise still matters in customer service.
The company’s pivot raises questions about the future of AI in the workplace. While automation can enhance efficiency, it cannot fully replace human interaction in industries that rely on personalized service. Klarna’s decision to rebalance its workforce suggests that businesses must strike a careful balance between technology and human labor.
Sources:
https://gizmodo.com/klarna-hiring-back-human-help-after-going-all-in-on-ai-2000600767
https://www.techspot.com/news/107881-klarna-hiring-humans-again-ai-replacements-fail-deliver.html
https://www.aol.com/finance/klarna-flips-ai-first-hiring-110700909.html