Klarna’s CEO is sparking controversy after boasting that artificial intelligence is replacing his human workforce. Per reports by Futurism, the Swedish fintech company hasn’t hired anyone in a year due to AI.
What’s happening?
In a recent interview with Bloomberg, founder and CEO of Klarna Sebastian Siemiatkowski said the company stopped hiring employees a year ago.
The move came as an effort to embrace and transition toward AI. While Siemiatkowski views the move as beneficial for employees, others are skeptical.
“People internally at Klarna are just rallying to deploy as much efficiency AI as they can,” Siemiatowski told Bloomberg. “We’re going to give some of the improvements that the efficiency that AI provides by increasing the pace at which the salaries of our employees increases.”
AI implementation is a double-edged sword. Though it optimizes efficiency, it also translates to more layoffs and less overall hiring.
On the flip side, Siemiatkowski has tried incentivizing AI to the remaining employees at Klarna. However, as Futurism noted, the details of those incentives and their impact are not clear.
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Why is the increase in AI important?
While AI offers benefits from a productivity standpoint, those gains come at a price. As more companies implement AI into their workflow, more employees are getting laid off.
Over the next five years, an estimated 83 million jobs will be lost as a result of AI technology, with 69 million jobs created, according to the World Economic Forum.
“Despite the uncanniness, it’s clear from Klarna’s increased earnings last quarter that it’s weathering the decline in headcount,” wrote Noor Al-Sabi from Futurism. “That’s great news for Siemiatkowski — but not for his former employees, of course.”
What’s being done about the growing AI work