After firing 700 people for AI, THIS company is now hiring humans again-- Here's why

Swedish fintech company Klarna, best known for its “buy now, pay later” services, is backtracking on its bold move to replace human workers with artificial intelligence. The company had begun shifting toward AI in 2022, laying off about 700 employees and embracing automation through a partnership with OpenAI. The goal? To boost efficiency and cut costs.


By 2023, Klarna had completely frozen human hiring. Generative AI was handling everything from customer support and translations to data analysis and art creation. CEO Sebastian Siemiatkowski even went so far as to say, “AI can already do all of the jobs that we, as humans, do.”

Why Klarna is changing direction

Despite early confidence, it turns out that relying too heavily on AI came at a cost—quality. Klarna began receiving criticism for the decline in service standards. In a recent interview with Bloomberg, Siemiatkowski admitted that the company focused too much on cost savings and neglected customer experience.


“Cost unfortunately seems to have been a too predominant evaluation factor,” he said. “What you end up having is lower quality.”


He also stressed that human touch in customer service remains essential:


“From a brand perspective... it's critical to make it clear to your customers that a human will always be there if they need one.”

Klarna to rehire, focus on gig-like model

Now, Klarna plans to bring back human employees—especially for customer service. It’s launching a large-scale recruitment campaign, offering flexible, remote jobs aimed at students and people in rural areas. This new model will allow workers to log in and work as needed, similar to the gig economy.

It’s not just Klarna

Klarna isn’t the only company realizing that AI isn’t a cure-all. Other firms like Duolingo and CrowdStrike also shifted work to AI and cut jobs, only to face mixed results. A 2024 global survey of 1,400 business leaders revealed widespread dissatisfaction with AI integration. In the UK, 55% of executives who replaced humans with AI said they regretted it.

Learning the hard way

Klarna’s AI pivot also sparked backlash for how it was handled—layoffs were announced via pre-recorded video, and some ex-employees’ personal information was made public.


Even though the company saved $10 million on marketing using AI, it now recognizes that technology can’t fully replace people. While Klarna still plans to trim its workforce over time to around 2,500, its new direction highlights an important lesson: the human element matters—especially in customer-facing roles.

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