Klarna, the Swedish buy-now-pay-later company, is facing severe net losses of $99 million in the first quarter, more than double from last year. The company previously paused its US IPO and has shifted its stance on AI, moving from boasting about its automation to acknowledging the necessity of human customer service. Although CEO Sebastian Siemiatkowski emphasizes the role of AI in workforce reduction, the decline in public confidence in AI technology and failure of American customers to repay loans contribute to Klarna’s struggles, marking a challenging time for the company amidst economic uncertainties.
The company had already paused its highly anticipated IPO in the US last month, which once valued it at over $15 billion.
During an interview with Bloomberg earlier this month, however, Siemiatkowski struck a dramatically different tone, revealing that the gambit hadn't paid off.
Siemiatkowski defended his embrace of AI last week, boasting that the tech allowed Klarna to shrink its workforce by 40 percent.
However, while it could be easy to see Klarna as the canary in the coal mine for the AI industry as a whole, its rapidly mounting losses involve other factors.
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