As the global debate over artificial intelligence (AI) and job security continues, Swedish fintech giant Klarna has made headlines by reversing its earlier decision to replace human staff with AI tools. Two years after laying off hundreds of employees, the company is now rehiring, citing a decline in the quality of AI-driven work.
The move challenges widespread fears that AI will permanently displace human workers and reinforces the notion that some aspects of human labor remain irreplaceable.
CEO Admits Mistake in Relying Too Heavily on AI
In a report by Futurism, Klarna CEO Sebastian Siemiatkowski admitted that the quality of customer service and brand interaction deteriorated after the company increasingly relied on AI agents. “From a brand and customer experience perspective, it’s critical to provide accurate and comprehensive responses—something AI couldn’t consistently deliver,” he said.
While acknowledging that AI had helped the company save costs, Siemiatkowski emphasized that cutting corners on quality was not sustainable. “Yes, human labor is costlier, but customer trust and satisfaction are far more valuable in the long run,” he added.
$10 Million Saved, But At What Cost?
Klarna halted hiring in 2023 and aggressively adopted AI-based systems, reportedly saving around $10 million by reducing its human workforce. At one point, the company claimed its AI tools could perform tasks equivalent to those of 700 employees.
However, those savings came with a trade-off. As automation scaled, customer complaints reportedly increased, prompting management to reconsider the strategy.
Job Cuts at Klarna and Across the Industry
According to reports, Klarna’s employee count fell from 5,527 in December 2022 to 3,422 in December 2024. The fintech firm is not alone in its AI pivot. Other tech companies, including cybersecurity firm CrowdStrike, have also opted to reduce staff in favor of automation.
Duolingo Holds Its Ground on AI Use
Language learning app Duolingo has also faced criticism for letting go of human contributors. Unlike Klarna, the platform has stood by its decision, maintaining that AI can perform content and support tasks more efficiently than human staff.
The Bigger Picture
Klarna’s reversal serves as a reality check in the AI vs. jobs debate. While AI offers significant cost-saving and efficiency advantages, it is not yet a full substitute for human intuition, empathy, and quality control—especially in customer-facing industries.