This CEO’s regret about AI will change how you view automation
In a rare moment of reflection, Klarna Group Plc’s co-founder and CEO, Sebastian Siemiatkowski, has publicly admitted that the fintech giant’s aggressive move to replace human customer service agents with artificial intelligence (AI) was a misstep. His remarks, made at Klarna’s Stockholm headquarters and reported by Bloomberg, challenge the prevailing assumption that AI is the more efficient alternative.
“As cost unfortunately seems to have been a too predominant evaluation factor when organising this, what you end up having is lower quality,” Siemiatkowski said, acknowledging that the company’s AI-first approach in customer support delivered subpar results.
His candid confession is timely. As organisations worldwide accelerate AI integration across departments, Siemiatkowski’s experience suggests that the human element in service roles remains indispensable—and irreplaceable in certain contexts.
Klarna, once hailed as a pioneer for boldly using AI in customer service, halted traditional hiring for more than a year as it doubled down on automation. By 2024, the company had announced that AI was performing the tasks of 700 former human agents—a statement that rattled the global call centre industry and contributed to a notable drop in shares of Teleperformance SE, a French outsourcing firm.
But what seemed like a cost-cutting masterstroke began to show cracks. Siemiatkowski now admits that the quality of customer interaction declined, causing the company to reconsider its approach.
“Really investing in the quality of the human support is the way of the future for us,” he said, making it clear that Klarna no longer views AI as a full substitute for human empathy and judgement in service roles.
In a notable pivot, Klarna is launching a new wave of recruitment for customer service roles—an uncommon move for a tech-forward fintech firm. The company is trialling a model where individuals, such as students or rural residents, can log in remotely and provide support on-demand, similar to the Uber model. Currently, two agents are part of this pilot programme.
“We also know there are tons of Klarna users that are very passionate about our company and would enjoy working for us,” said Siemiatkowski, highlighting the dual benefit of tapping into brand loyalty while improving service quality.
This renewed commitment to human-led support is not just about performance—it’s also a strategic brand decision. Klarna now believes customers should “always” have the option to speak to a real person, reinforcing the importance of emotional intelligence, problem-solving and reassurance—traits AI has yet to master.
Despite scaling back its ambitions in customer service, Klarna is not abandoning AI. The company continues to rebuild its tech stack with artificial intelligence at the core, developing a digital financial assistant designed to help users secure better interest rates and insurance deals.
Its collaboration with OpenAI remains robust. “We wanted to be [OpenAI’s] favourite guinea pig,” Siemiatkowski said, referencing Klarna’s early involvement in testing generative AI tools in 2023.
However, the CEO now recognises that AI, no matter how advanced, is not a silver bullet. In customer support especially, a blend of tech innovation and human connection is proving more effective than pure automation.
Klarna’s AI rethink comes after a period of significant market turbulence. The firm’s valuation plummeted from $45.6 billion in 2021 to just $6.7 billion in a 2022 funding round. Though it has since bounced back and was aiming for a $15 billion valuation through an IPO, those plans have been paused amid market uncertainty, according to Bloomberg.
While the company is cautiously rehiring, overall headcount will still decline—falling from 3,000 to around 2,500 within a year, mostly through attrition. Siemiatkowski noted that further reductions may follow as AI improves, but warned against overpromising technological speed. “I feel a bit like Elon Musk,” he quipped, “always wanting to say it’s going to happen tomorrow, when it’s going to take a little bit longer.”
A wake-up call for business leaders
Klarna’s experience should serve as a wake-up call to CEOs and HR leaders exploring AI integration. While artificial intelligence holds transformative potential, blind faith in automation—especially when driven by cost alone—can backfire.
As Klarna rebalances its tech-human equation, its journey offers a crucial reminder: AI can enhance jobs, but replacing people altogether may carry unexpected costs to service, reputation, and trust.
Klarna’s recalibration is a timely case study for businesses grappling with the integration of AI. Rather than reinforcing fears that technology will replace human jobs wholesale, it illustrates a more nuanced future—where automation supports, but does not supplant, the human workforce.