Fintech Klarna froze hiring and 27% of its workforce disappeared
Fintech firm Klarna released its H1 financial report today. The Swedish firm has swung to profitability, partly as a result of surging employee productivity, which itself seems to be related to a dramatic reduction in headcount.
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Revenues per employee rose 73%, from $392.5k in H1 2023, to $687.5k in H1 2024.
This increase in productivity was partly by virtue of Klarna's use of AI. Approximately 90% of its employees use generative AI, and Klarna says the technology has been used to do the work of 700 employees.
However, by our own estimates - based on Klarna's stated revenues and rolling revenues per head on a 12-month trailing basis - Klarna has also eliminated 1,400 employees from its headcount. At the end of H1 2023, our estimates suggest it employed ~5,175 people. At the end of H1 2024, we estimate that's fallen to just 3,771 people.
A Klarna spokesperson verified the rough accuracy of our estimates. However, he says the fall wasn't the result of layoffs. Klarna froze hiring last year, with the intention of reducing headcount through attrition. Its estimation was that headcount would reduce by about 20% per year, around 1,000 people, significantly below the actual figure. It seems to have been more successful than expected.
As they pursue profitability, other fintechs might get ideas. Klarna, however, is now hiring again. It has 45 open job listings, including 19 in software engineering.
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