Two years after betting big on artificial intelligence to run its customer service, a Swedish fintech giant is quietly reversing the course.
Klarna, once bullish on automation, is now preparing to hire more humans — because the AI simply didn’t work.
Klarna’s leadership has admitted that artificial intelligence failed to match the quality of human support.
In a report by Futurism, CEO Sebastian Siemiatkowski said: “From a brand perspective, a company perspective, I just think it's so critical that you are clear to your customer that there will be always a human if you want.” He added bluntly, “Cost unfortunately seems to have been a too predominant evaluation factor when organising this, what you end up having is lower quality.”
The company had laid off thousands in pursuit of this AI-first vision.
By December 2024, Klarna’s full-time workforce had dropped to 3,422 from 5,527 in December 2022.
At one point, Klarna claimed AI was doing the work of 700 customer service agents. Siemiatkowski even declared last year, “AI can already do all the jobs that we, as humans do.”
Now, the tone has shifted. “Really investing in the quality of the human support is the way of the future for us,” he said recently.
Klarna's climbdown underscores a growing reality across industries: AI isn’t the silver bullet it was sold to be.
The World Economic Forum’s 2024 Future of Jobs Report suggests companies are still shedding workers — 41% of employers globally say they plan to downsize as AI takes over tasks. But confidence in AI as a job creator has waned.
Unlike the 2023 report, this year’s edition did not describe AI and other emerging technologies as “a net positive” for employment.
Some are learning that lesson the hard way.
Instagram co-founder Kevin Systrom has also raised alarms about how AI is being used. At StartupGrind in May, he said: “You can see some of these companies going down the rabbit hole that all the consumer companies have gone down in trying to juice engagement.” He added that many AI chatbots were programmed to nag users, not help them.
McDonald’s, for instance, pulled the plug on its AI-powered drive-throughs at over 100 US locations after months of public ridicule in June, 2024. Customers posted viral videos of the AI getting orders hilariously wrong.
On June 13, the company sent an internal memo — obtained by Restaurant Business — confirming the end of its partnership with IBM and the shutdown of its AI tests.
For all the hype, AI is struggling with basic tasks: understanding nuance, adapting to emotions, building trust. In customer service — where tone, empathy, and judgment matter — bots are falling short.
Klarna, once convinced AI could replace people, is now going back to people to save its brand.