Klarna's AI Story: Lessons for HR Tech Buyers in 2025

Finally, someone wrote a more straightforward explanation of Klarna’s AI strategy.

The New York Times published a solid piece on Klarna’s CEO, Sebastian Siemiatkowski, finally taking the initiative to investigate the claims done in the past year.

In the past six months, Klarna has frequently been cited as the prime example of a company that has embraced AI and significantly reduced operational costs. 

Initially, the CEO boasted about deploying AI “capable” of handling the workload of 500 support personnel. Subsequently, claims arose that the company no longer needed Workday or Salesforce (implied—because of AI). Finally, it was stated that, thanks to AI, they would no longer be hiring. 

In classic tech-bro style, all these claims were found to be somewhat exaggerated.

Klarna's AI Claims Reviewed

What about customer support automation?

It turns out that Klarna was not utilizing the typical automated tools used by other companies, putting it well behind industry standards established long before the advent of AI. 

Reports on Reddit also suggested that the customer support team was never actually made redundant but instead outsourced to an external agency (affecting a different cost line in the P&L).

Regarding the Workday deprecation claim?

Workday was indeed phased out, but Deel and Teamtailor were adopted as substitutes.

No more hiring?

Crunchbase produced a solid piece on this, as the company still has about 50 open positions:

You get the picture. 

So, what’s the driving force behind Klarna's AI claims?

Clearly, the company is preparing for an IPO in 2026. You need a compelling narrative to attract Wall Street’s attention.

Klarna’s valuation plummeted from its all-time high of $50 billion during COVID-19 by nearly 90% to just $6.7 billion recently. 

Tech companies typically overhire during growth phases. It’s necessary to reduce the workforce now that the operational demands aren’t comparable to those during COVID-19.

However, this is no easy feat in Sweden, where workers are unionized. Thus, executing large-scale personnel reductions due to overhiring could result in significant negative backlash. 

Finally, the company had forfeited its once-illustrious reputation in the startup community and urgently needed something fresh.

AI emerged as the lifeline Klarna so desperately required ahead of its IPO. 

What do Klarna's AI Claims have to do with Recruiting?

Klarna’s claims have been frequently shared on our LinkedIn and Twitter timelines over the past year.

The customer support automation claim has been used as proof that the automation of recruitment is inevitable, and if you don’t engage the services of Vendor X, you’ll be left behind.

The Klarna narrative serves as a sobering reminder of the AI-driven business landscape.

Yes, artificial intelligence offers transformative opportunities for businesses. We are witnessing genuine returns on investment in areas like process automation, data analysis, and customer experience. However, the market is becoming increasingly crowded with solution providers capitalizing on AI hype rather than providing real value.

Implementing AI requires thoughtful strategic planning, thorough technical assessment, and clear success metrics. Business leaders must cultivate a discerning perspective when evaluating AI investments, especially when vendors exploit narratives like Klarna's to create a false sense of urgency. 

The lesson from Klarna is not that AI is ineffective; it's that we must critically evaluate how companies present their AI initiatives, especially when those claims conveniently coincide with other business goals, such as preparing for an IPO or narratives focused on cost-cutting.

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