Klarna changes its AI tune and again recruits humans for customer service
135 comments
·May 11, 2025gregdoesit
darth_avocado
I think this is in the broader context of Klarna CEO claiming he had stopped hiring for almost a year because of AI. It was a big talking point for a lot of CEOs and LinkedIn influencers. Big enough that incompetent management across the industry was following Klarna’s steps and reducing staffing (Not because AI, but because they could short staff teams with AI as an excuse). That is why when there is a clear evidence that Klarna was completely wrong, it needs to be talked about.
Previous discussion: https://news.ycombinator.com/item?id=42432494
iforgetti
Glen Okun of NYU business school has written about BNPL loan portfolio weakness.
The AI marketing is just an attempt to reframe the value narrative of the company before IPO. They would rather be seen as an AI company than an unsecured lender of last resort.
The narrative on Klarna’s core business is not good in any case, either an extractive lender benefiting from people buying what they may not afford and charging exorbitant interest or a lender of last resort who has not properly underwritten the risk in their portfolio. Neither is preferential to them compared to a value narrative framing them as an AI company. Likely the market is too skeptical in this environment to take the bait however.
subtlesoftware
If you default on your Klarna loan, you could pay them back in support hours:
> The pilot has started small, with two of the new breed of customer-service agents live now, but the ambition is to tap into candidates such as students or rural populations. “We also know there are tons of Klarna users that are very passionate about our company and would enjoy working for us,” he added.
[from the bloomberg article: https://www.bloomberg.com/news/articles/2025-05-08/klarna-tu...]
kaliszad
Here is an archive of the article:
https://web.archive.org/web/20250512120733/https://www.bloom...
spaceman_2020
I can't believe it takes b-school professors to figure out that people financing their DoorDash might not be the best people to lend money to.
rchaud
This is the primary positioning tactic used across the startup industry . Uber isn't a taxi app, it's actually the "future front end for millions to access autonomous transport". Doordash isn't a delivery app, it's an "on-demand logistics" platform.
Similarly, Klarna isn't a shady payday loan company, it's an "AI-first consumer finance play".
dagw
Not that I necessarily disagree with your overall take, but can someone explain how 'financing' your DoorDash order with a credit card is perfectly OK, but financing with Klarna is somehow dubious and shady. Surely the problem is buying stuff you cannot afford, not how you choose to buy it.
blibble
> a lender of last resort who has not properly underwritten the risk in their portfolio.
I thought they more or less instantly offloaded the risk as asset backed securities to clueless people who didn't know the actual risk profile what they were buying
sound familiar?
Freak_NL
They are scum, and currently are suffering from increased scrutiny from governments for pushing their buy-now-pay-later exploitative business everywhere. In the Netherlands they are even attempting to gain access to brick-and-mortar stores by partnering with Adyen¹ which provides the payment solutions, but the government is being vocal about that being unwanted. This is in addition to the unabating coverage in the media about how Klarna is about as harmless as vaping — that is, they are enticing young people into buying stuff they don't need² before they can afford it.
Shopkeepers don't want it, but fear they must if big chains start offering it, just as online shops feel like offering it is unavoidable due to the popularity in certain demographics. The financial watchdog doesn't like Klarna, and is increasing scrutiny³.
If Klarna has trouble marketing their value, then that at least is good news, but not unsurprising given the spate of attention it received over the last two years.
1: So much for the ethical side of Adyen (e.g., https://www.adyen.com/impact sounds hollow when you partner with loan sharks).
2: Some people are quick to defend Klarna for offering people a chance to buy their necessities with what amounts to a payday loan, but that is bullshit. Klarna predominantly is not used for daily necessities.
3: Klarna now has to state that they are offering a loan in the Netherlands where they are available as payment option, with the mandatory "borrowing money costs money" tag-line.
nikanj
Shopkeepers do want it, because it expands their market from those with funds to also those without. Klarna carries the lending risks, for the shopkeeps it’s a risk-free customer base
dreamcompiler
WeWork tried this and it worked out great for their CEO. They were a real estate landlord masquerading as a tech company. Stupid SoftBank bought that lie and made Neumann filthy rich.
But as you say that was ZIRP when everybody was stupid and this is now.
vrosas
To be fair, admitting their amateur foray into chatbots was an abject failure and rolling it back really does put them at the forefront of the AI movement.
Avicebron
The problem with "AI-first" companies is that they really are just shells for people who want to be "AI-First" engineers, and not "guy who solved my problem affordably and was nice" engineers. The average person doesn't care how you ended up fixing the weird charge on their account, it's how fast and how proficiently did you fix it
pjc50
> mainstream media does not fact checking themselves.
Mainstream media will print a press release for you if you send it to them. It is very important to understand how limited the fact checking really is. If a mainstream paper prints a statement of the form "X said Y", you can be sure that:
- they are pretty good at checking that person X did actually say Y
- they make no effort whatsoever to fact check the underlying statement Y.
There isn't really the money or interest in actually investigating the claims of every little press release.
> really wants to be seen as an "AI-first tech company" when it goes public, and not a "buy now pay later loan company" because AI companies have higher valuations even with the same revenue
Yes. This is because multibillion dollar investments are made by people who are easily distracted by the jangling keys of AI.
cosmicgadget
I liked your comment but don't think the shot at media was necessary. A company replacing workers is news enough and the fact checking need only be to validate that information. The "as good as 700 workers" I assume was presented as a claim, not a fact.
Evaluating the effectiveness of the AI bot is another matter and firmly in the investigative journalism sphere. Coincidentally that is an awesome application of a blog.
AznHisoka
Sorry, but its attitudes like yours that make it easy for media to keep spouting out ridiculous claims/lies, and get away with it.
Shots are absolutely necessary when its warranted. Full. Stop.
cosmicgadget
Am I allowed to respond once you've used "full. stop."?
kace91
I went through klarna’s interview process some time ago.
I had to go through both reasonable and weird steps, including IQ tests for some reason. I passed them all, and then I was ghosted, and upon reaching out I was met with months of excuses asking me to wait (the recruiter is on vacation, we’re waiting for the new budget to be approved, “I personally forgot to reply”, and a few others). I eventually stopped reaching out and never heard back.
If the whole company is as dysfunctional as those interactions implied, I wouldn’t really look up to them as trendsetters.
DanielHB
Yes they are, a few years ago once got a scuffle with the Swedish tax agency because they were abusing some tax loopholes. The tax agency came in with the bill and they just immediately "layoff" 90% of the contractors working there (a good chunk of the workforce). All so their quarterly statements wouldn't look bad for the stock market.
Klarna is the prime example of toxic public companies
tedeh
Klarna hasnt even gone public yet...
financetechbro
Doesn’t matter. They want to go public and with that in mind will operate the business to ensure the financials look “good” for when it’s time to IPO
0dayz
I remember hearing something about doing IPO in USA?
null
baobabKoodaa
A few days ago Klarna's AI bot lied to me that it was human, lied about speaking Finnish as its native tongue, and wrote me a Haiku about Klarna's cashback.
bornfreddy
That's actually a great captcha - if the presumed human can write a haiku about something very quickly, they are probably a bot.
dakiol
Umm, I think any respectable human would simply deny writing a haiku. So, a bot can simply mimick that behaviour.
dmd
Can, but won't!
baobabKoodaa
Sure, it could. In theory.
DebtDeflation
I've worked in the field of Contact Center AI for almost 10 years now. Rough order of magnitude you can expect to deflect around 30% of inbound contacts with an AI chatbot. You can also expect to reduce agent Average Handle Time by 15-20% using AI enabled semantic search and workflow automation. This is ballpark, if your contacts are simpler you can do a little better, if they're complex you'll do a little worse.
The problem is that vendors are telling companies they can eliminate 80-90% (maybe even 100% if they can keep a straight face) of their customer service agent jobs with AI, and that is nonsense.
abhisek
> AI gives us speed. Talent gives us empathy
Not sure if this is the primary reason. It just seems to me their AI adoption was unable to meet the baseline effectiveness of their human agents.
jsheard
What does empathy even mean in the context of payday-loans-as-a-service? They'll lure people debt traps and then bleed them dry, but pretend to feel bad about doing it?
mrbungie
Run of the mill corpo speak.
AIPedant
“Empathy is when you use common-sense reasoning to solve problems that weren’t explicitly covered during training.”
osigurdson
I think it is generally in the best interest of companies to overstate what they are able to do with AI. Investors aren't interesting in hearing "we tried vibe coding but got tired of reviewing and fixing the trash code it produced". No, they want to hear "we've reduced our headcount by 40% while increasing customer satisfaction by 60%". Overstating AI adoption and success amplifies P/E ratios.
candiddevmike
I wonder if investors see AI usage as some kind of reassurance that their other investments are going to make money. Basically everyone is lying through their teeth to infantilize investors that they made A Good Choice investing in nebulous AI companies. The folks that don't play the game don't get funding.
kgeist
>While Klarna pioneered the use of AI in customer service
Local firms here have had bots in customer service for many years now, even well before the transformers era. Is Klarna living in a bubble?
cosmicgadget
They are pioneering too hard to pay attention to the rest of the industry.
kotaKat
Pioneer now, pay the technical debt later. :)
bookofjoe
Quote of the day.
g9yuayon
I'm more curious about how much cost of customer service can Klarna cut by using AI , and how much marginal improvement to their customer service can Klarna achieve. Customer service should be an amazing application to AI: AI solves X% of the problems, and for the remaining 1 - X% of the problems, customers will tell the system deterministically, which means the company can continuously improve their systems with customer feedbacks.
lm28469
Anyone with half a brain saw it coming but somehow these elite executives lack basic common sense. I wonder who they are surrounded with to come up with such deranged business decisions
vmurthy
I've been thinking that they probably are smart enough to know this but see utility in spewing such lies. Because optics implies higher valuation. It's follow the money as usual :(
iamsanteri
Even here people don’t seem to realize, or even consider the likely fact that Klarna CEO has been bullsh**ing all along. I read a hugely viral post of them replacing their entire CRM with AI. It’s ridiculous to me people took that seriously!
AznHisoka
Absolutely, people need to assume everything they read in media is wrong, then find evidence to prove otherwise. Klarna replaced their CRM with AI? Good. Its absolutely false until I find enough evidence going forward that its true
rwmj
It's Ryanair all over again. Remember the stories about how Ryanair were going to make passengers pay to use the toilets, or the "all standing" plane (which would obviously be highly illegal, but credulous journalists printed it anyway). All a very cheap, very successful marketing campaign.
christophilus
How is that a successful marketing campaign? Who were they marketing to? Sardines?
rwmj
The main thing was it got their name in the papers, and (in this case) their notoriety as "the cheapest airline" was exactly what they wanted.
Pooge
I'm convinced Wise is using AI for their customer service. I had absolutely no trouble getting help when I needed and the employee was always helpful, but ever since the birth of ChatGPT I don't even get an answer anymore.
They don't understand the problem, and when I point that out by explaining my issue another way they just answer "Have I solved your issue?". Well, no, you didn't; you didn't even understand the problem.
The worst part is that they are pretending they are humans.
n_ary
> They don't understand the problem, and when I point that out by explaining my issue another way they just answer "Have I solved your issue?". Well, no, you didn't; you didn't even understand the problem.
This is a real thing. I had similar experience with Discord support. They closed me ticket or sent me to weird chases(restart app, reinstall app, format your phone!, upgrade to latest os version, try a different phone!, update your appstore!, change mobile operator etc). It was insane and in the end, I said I don’t care and will uninstall discord. Then I get a small reply to the ticket, did we solve your problem? If so, we can close this ticket.
And no, I was not doing vague descriptions, I literally sent screen recordings of exact steps to reproduce the issue.
Either Klarna is really good at pulling strings to get media coverage, or mainstream media does not fact checking themselves. About a year ago, the company was everywhere in the media when its CEO announced that it created an AI bot that is doing the equivalent of 700 fulltime customer service folks.
I did what seemingly no other publication reporting on it did: signed up for Klarna, bought one item and used this bot.
I was... not impressed?
Klarna's "AI bot" felt like the "L1 support flow" that every other company already has in-place: without AI! Think like when you have a problem with your UberEats order and 80% of cases are resolved without a human interaction (e.g. when an item is missing for your item.)
I walked through the bot's capabilities [1] and my conclusion was that pretty much every other company did this before (automating the obvious support cases.) The real question should have been: why did Klarna not do it before? And when it did, why did it build a wonky AI bot, instead of more intuitive workflows than other companies did?
My sense is that Klarna really wants to be seen as an "AI-first tech company" when it goes public, and not a "buy now pay later loan company" because AI companies have higher valuations even with the same revenue. But at its core, Klarna is a finance or ecommerce-related company: an not much to do with AI (even if it uses AI tools to make its business more efficient - regardless of whether it could use non-AI tools to get the same thing done)
[1] https://blog.pragmaticengineer.com/klarnas-ai-chatbot/