Klarna Is Hiring Customer Service Agents After AI Couldn't Cut It on Calls, According to the Company's CEO Klarna released an AI chatbot and implemented an AI-induced hiring freeze last year.

Months after touting AI's potential to replace human work, Klarna CEO Sebastian Siemiatkowski is backtracking and reversing an AI-induced hiring freeze to bring on more human staff.

Siemiatkowski, 43, told Bloomberg on Thursday that Klarna is hiring human workers again to ensure that customers always have a human presence to talk to, if needed.

"From a brand perspective, a company perspective, I just think it's so critical that you are clear to your customer that there will always be a human if you want," Siemiatkowski told the outlet.

Related: Klarna CEO Says AI Could Help Reduce Company Headcount By 50%

Siemiatkowski tells Bloomberg that the AI-focused strategy Klarna employed for the past few years wasn't the right path. He says that while AI customer service chatbots were cheaper to employ than human staff, they resulted in a "lower quality" output.

So now Klarna is recruiting a new batch of customer service employees, and the company will now focus on providing "quality" human support for customers, he said. In its recruitment drive, the company is targeting students, rural populations, and dedicated Klarna users who are passionate about the company. The roles are fully remote.

"Really, investing in the quality of human support is the way of the future for us," Siemiatkowski told Bloomberg.

^{Klarna CEO Sebastian Siemiatkowski. Photographer: Chris Ratcliffe/Bloomberg via Getty Images}

In December, Klarna paused all hiring a year prior as it focused on AI investments. The company's headcount dropped 22% in that time frame to 3,500 employees, mostly because of attrition, Siemiatkowski disclosed at the time. He asked Klarna's employees to turn to AI to help fill in the gaps left by their departing colleagues.

In February 2024, the company claimed AI could do the work of 700 customer service agents and had taken on 75% of the company's customer chats, or about 2.3 million conversations, within a month of launch. The bot handled questions about topics like refunds, returns, and payments in more than 35 languages.

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Early tests with Klarna's customer service AI chatbot showed that the AI churned out exact answers from existing documentation and passed on customers to human support agents quickly. Gergely Orosz, an author and writer at The Pragmatic Engineer, wrote on X last February that Klarna's AI chatbot acted "basically as a filter" to reach human customer support agents when he tested it.

Klarna is valued at $14.6 billion. Since its founding in 2005, the company has helped buy-now, pay-later loans go mainstream. In March, Klarna became Walmart's exclusive buy now, pay later provider.