Here’s How Klarna Has Cut Staff in Half While Raising Pay By 60%

Despite the reduction in headcount, Klarna reported a 108% increase in revenue over the past three years.

By Sherin Shibu | edited by Jessica Thomas | Nov 19, 2025

Key Takeaways

Buy-now-pay-later fintech company Klarna has cut its headcount in half over the past three years through natural attrition and a hiring freeze.
Klarna replaced staff members who left with AI instead of making new hires.
The company used some of the cost savings from the hiring freeze to increase pay by 60% for remaining employees.

AI has enabled buy-now-pay-later fintech company Klarna to halve its headcount while simultaneously increasing the average pay for its remaining employees by nearly 60%.

Klarna CEO Sebastian Siemiatkowski said earlier this week that the company has cut its staff roughly in half, decreasing its headcount from about 5,527 employees in 2022 to around 2,907 by 2025, per The Guardian. Klarna achieved the reduction through natural attrition and a hiring freeze; it replaced departing staff with AI-driven technology instead of making new hires.

The company integrated AI extensively into marketing, customer service and internal processes, automating many repetitive tasks. For example, Klarna’s AI customer service chatbot carried out the work of 700 full-time customer service agents and handled 2.3 million conversations in the first month it was deployed, February 2024. The chatbot has since expanded to handle the work of 800 full-time customer service employees this year, per Siemiatkowski.

The CEO told analysts on an earnings call on Tuesday that Klarna had managed to increase revenue by 108% since 2022 while keeping operating costs flat. He said that the 108% number was “pretty remarkable, and unheard of” for businesses. Klarna said in its earnings report that the revenue growth was due to its “AI-enabled productivity and cost discipline.”

Sebastian Siemiatkowski, chief executive officer and co-founder of Klarna. Photographer: Michael Nagle/Bloomberg

Siemiatkowski explained that Klarna used some of the cost savings from its hiring freeze to increase pay for remaining employees, with average compensation rising by 60% since 2022, from $126,000 in 2022 to $203,000 today.

“We made a commitment to our employees that all of these efficiency gains, and especially the applications of AI, should also, to some degree, come back in their paychecks so that they are fully incentivized,” Siemiatkowski said on the call.

Klarna posted its first earnings report since its September IPO on Tuesday, logging an increase in sales and customers by the end of the third quarter. Revenue increased 28% to $903 million, higher than the $885 million Wall Street analysts expected.

The company reported 114 million customers and 850,000 merchants as of the third quarter, up from 87 million customers and 616,000 merchants a year prior.

However, the business also posted a loss of $95 million over the period, higher than the $4 million loss last year, due to changes in accounting standards it had to follow in the U.S. after making its initial public offering in September. Since Klarna’s IPO, its stock has dropped almost 30% to a price of $31.95 at the time of writing.

Key Takeaways

Buy-now-pay-later fintech company Klarna has cut its headcount in half over the past three years through natural attrition and a hiring freeze.
Klarna replaced staff members who left with AI instead of making new hires.
The company used some of the cost savings from the hiring freeze to increase pay by 60% for remaining employees.

AI has enabled buy-now-pay-later fintech company Klarna to halve its headcount while simultaneously increasing the average pay for its remaining employees by nearly 60%.