Buy now, pay later company Klarna is looking to shed nearly half of its workforce in the coming years thanks to efficiency gains it says come from its investment in artificial intelligence (AI).
The company has already reduced its workforce from 5,000 to 3,800 people over the past year and wants to reduce that number to 2,000 employees by using AI in marketing and customer service.
Boss Sebastian Siemiatkowski told the BBC the job cuts would allow Klarna to pay its remaining employees better.
But he said the government needed to consider what to do about AI, which he said would have a “dramatic impact” on jobs and society.
“I think politicians should already be thinking today about other alternatives to support people that might be effective,” he told BBC Radio 4’s Today programme.
He said it was “too simplistic” to simply say new jobs would be created in the future.
“I mean, maybe you can become an influencer, but it’s hard to do that if you’re 55,” he said.
The recent proliferation of AI has highlighted its benefits and risks.
Earlier this year, The International Monetary Fund (IMF) has declared She estimates that AI would impact nearly 40% of all jobs and would “likely worsen overall inequality.”
In other sectors, such as the gaming industry, developers have warned They are already losing jobs because of AI.
Klarna, which is based in Sweden and has two offices in the UK, revealed its job cuts plans as it announced interim results which showed a 27% increase in revenue to SEK 13.3 billion (£990 million).
“Our proven efficiencies have been enhanced by our investment in AI, which has reduced operating expenses and improved gross profits,” he said.
The announcement comes as unions warn of massive job losses linked to the growth of AI and call for legislation to protect workers.
Mr Siemiatkowski said Klarna would reduce its workforce through what he called “natural attrition” – effectively a hiring freeze, where staff are not replaced after they leave.
This usually means that those who remain are left with an increased workload.
But Mr Siemiatkowski argued that AI would replace this work, and even said it was a potential “positive development” for some people who could be paid more.
While he said it was “essential” the government considered what to do for those who had lost their jobs, he suggested there was no way to “stop progress” for businesses like his.
“It is important that Europe and democracies are ahead in the evolution of AI,” he said.
Klarna is expected to cut its workforce ahead of its IPO, which has recently been dominated by companies investing heavily in AI, such as Nvidia and Microsoft.
This means that the fact that Klarna is seen as a big tech advocate could make its shares more attractive to investors when it eventually goes public.
