Klarna Shifts Focus Back to Human Customer Support After AI Initiative

Klarna, the prominent fintech company, has announced a renewed emphasis on human customer support following an extensive deployment of artificial intelligence (AI) in its operations. The company's CEO acknowledged the limitations of AI, signaling a shift away from a fully automated customer service model.

In an interview, the CEO revealed that Klarna is currently piloting a program to reintroduce human customer support representatives. This comes after a period where the company had reportedly not hired any new staff, relying instead on AI to manage customer inquiries. Previous reports had indicated that AI was performing the tasks of approximately 700 full-time employees, with customer satisfaction levels reportedly on par with human agents.

This shift in strategy marks a significant turnaround from the previous approach, which had seen Klarna embrace AI technology enthusiastically. In December, the CEO was represented by a digitally generated copy during the company's earnings presentation, showcasing a belief in AI's potential to supplant traditional roles. However, recent reflections indicate that the aggressive use of AI led to declines in service quality.

Despite the initial reliance on AI, Klarna has not entirely removed human interaction from its customer service framework. Thousands of customer support representatives employed by third-party service providers have continued to assist Klarna's clients. The company's plan is to transition these roles back to in-house employees, marking a strategic move towards insourcing as opposed to outsourcing.

The CEO mentioned that while specific numbers regarding new hires in customer support were not disclosed, the initiative is part of a small-scale pilot program. The company aims to include diverse candidates, such as university students and individuals from rural areas, in its recruitment efforts, allowing for remote work opportunities.

Klarna has been at the forefront of leveraging AI technologies, having partnered with OpenAI in 2023 to explore innovative solutions. The company's business model allows customers to make purchases through Klarna's credit service, with flexible repayment options. However, the recent financial climate has impacted Klarna significantly, as evidenced by a dramatic drop in its valuation--from $45.6 billion to $6.7 billion during a recent funding round.

Looking ahead, the CEO anticipates that the overall number of employees will continue to decline, projecting a turnover rate of 20% and estimating that the workforce will reduce from 3,000 to approximately 2,500 by year-end. Despite the integration of human support, the company remains focused on efficiency and cost reduction.