Buy now, pay later company Klarna has announced that it is cutting 10 percent of its workforce, citing weakening consumer confidence, surging inflation, a volatile stock market and the war in Ukraine.
In a blog post, Klarna chief executive Sebastian Siemiatkowski said: “When we set our business plans for 2022 in the autumn of last year, it was a very different world than the one we are in today. Since then, we have seen a tragic and unnecessary war in Ukraine unfold, a shift in consumer sentiment, a steep increase in inflation, a highly volatile stock market and a likely recession. All of which have marked the beginning of a very tumultuous year.
“While crucial to stay calm in stormy weather, it’s also crucial not to turn a blind eye to reality. What we are seeing now in the world is not temporary or short-lived, and hence we need to act. More than ever, we need to be laser-focused on what really will make us successful going forward. Based on this, the senior leaders of Klarna have made some really tough decisions. Some of the hardest ones we have ever had to make.”
BNPL company Klarna announces job cuts
Siemiatkowski added: “Together, we have re-evaluated the organisation to ensure that we can continue to deliver on our ambitious goals. We have done this evaluation based on two principles: Do we have the right teams focusing on the right things? Do we have the right people in the right place?”
Klarna’s chief went on to explain that the 10 percent cut in the workforce would impact “all domains” across the company. Employees in Europe would be compensated, added Klarna, while severance for employees in other regions would vary depending on where they work.
“I want to highlight that Klarna continues to hold a strong position in the market. We have a diversified business that distinguishes us from the competition. Therefore, I do remain relentlessly optimistic about Klarna’s future, despite what we now need to go through,” concluded Siemiatkowski.
Klarna serves more than 400,000 global retail partners including H&M, Saks, Sephora, Macy's, and Nike. It is active in 45 markets and has 150 million consumers.