Klarna, a major player in the Buy Now Pay Later (BNPL) industry, has announced plans to cut 10% of its workforce. The decision comes as the Swedish company faces challenges in the global economic landscape, including factors such as surging inflation and conflicts like the war in Ukraine. With approximately 6,500 employees, Klarna’s prospects have worsened since last year.

In a blog post addressing the job cuts, CEO Sebastian Siemiatkowski recognized the need to adapt to the changing business environment. He stated that the world today is very different from what it was when the company made its business plans for 2022. Siemiatkowski emphasized the importance of acknowledging reality and making difficult decisions to ensure the company’s future success. Klarna aims to refocus its efforts on key drivers of growth and ensure that it has the right people in the right positions.

Approximately 650 positions will be cut at Klarna, though the specific locations have not been disclosed yet. This move demonstrates the company’s commitment to making necessary changes and aligning its organization with its ambitious goals.

Klarna is a well-known name in the BNPL sector, with millions of users worldwide. In the UK alone, it has 16 million users and collaborates with numerous retailers to offer interest-free installment payment options. However, the company’s financial position has raised concerns. The Wall Street Journal recently reported that Klarna is seeking new investment, which could potentially lead to a lower valuation of the company from $46 billion to $30 billion. Klarna, however, has dismissed these claims as “pure speculation.” In 2021, the company reported an operating loss of SEK 6.58 billion ($689 million).

The job cuts at Klarna highlight the challenges faced by BNPL operators amidst a troubled global economy. Despite the sector’s rapid growth, companies must navigate economic uncertainties and adapt to changing consumer behavior to maintain their success. Klarna’s decision to prioritize focus and reassess its organization reflects its dedication to confronting these challenges directly. As the BNPL sector evolves, companies like Klarna will need to remain agile and resilient in order to stay ahead in this competitive market.

Useful links:
Klarna Official Website
The Wall Street Journal – Klarna’s Valuation and Funding