Klarna Hiring Back Human Help After Going All-In on AI

As soon as AI-powered chatbots seemed functional enough, buy now, pay later service Klarna went all in on them, promising to swap much of its human workforce with robotic replacements. Now it’s on a human hiring spree after running into the limitations of AI, according to Bloomberg.

Company CEO Sebastian Siemiatkowski recently announced that the company intends to make sure that customers will always have the option to speak to a human when they need service. It is, of course, doing that in a way that presents its own concerns—claiming that it will structure its new human-powered customer service cohort will be fully remote and with a “Uber type of setup” that seems like it will rely on contract work and will reportedly tap into an employee pool of students and people in rural populations. But if the best we can do is exploitative work or out of work entirely, I guess the former at least represents the slightest of improvements.

“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,” Siemiatkowski said, per Bloomberg.

It is a starkly different position than the company took just two years ago. Back in 2023, Siemiatkowski basically threw himself at AI, saying that he wanted his company to be OpenAI’s “favorite guinea pig.” The company instituted a hiring freeze and set out to replace as many humans on its payroll as possible with AI. By 2024, the CEO was bragging about cutting the company’s workforce nearly in half, dropping from a headcount of 3,800 to 2,000 by shifting to AI alternatives. He called the cutbacks “natural attrition” rather than the result of layoffs.

Klarna claimed that AI chatbots were handling two-thirds of customer service conversations within their first month of deployment and went on to claim that AI was doing the work of 700 customer service agents. The problem is that it’s really doing the work of 700 really bad agents, and that quality took a toll. “As cost unfortunately seems to have been a too predominant evaluation factor when organizing this, what you end up having is lower quality,” Siemiatkowski said. “Really investing in the quality of the human support is the way of the future for us.”

One response to this may be: no shit. People do not like talking to chatbots, no matter how advanced they may have become in recent years. A study conducted last year found that more than four in five people would choose waiting to talk to a human over getting immediately served by a bot. A Gartner survey found about two-thirds of customers prefer that companies don’t use AI for customer service, and there is research to indicate that people have lower trust in and satisfaction rates from AI agents.

Frankly, this is something that Klarna knew two years ago when it went the AI route, because it had humans in place for those exact roles. It seems the company opted to create a worse experience for its customers because it wanted to come across as forward-thinking and innovative and wanted to save money, until that worse experience actually proved more costly than paying people.