Categories: Tech

Klarna announces staff cuts with a recorded video message

Klarna, the well-known “buy first, pay later” service has been the star of news of all kinds in recent weeks. Now, according to reports from Protocol and TechCrunch, the Swedish company stands firing 10% of employees globally with a recorded video message. A fairly important cut, considering that the company currently boasts 7,000 employees, a number that will be reduced quite drastically.

Klarna: Employees fired with a pre-recorded message

Once again Klarna is at the center of a rather thorny issue. Apparently, the CEO Sebastian Siemiatkowski announced a major global layoff action in a recorded video message. And he cited “the war in Ukraine, a shift in consumer sentiment, a sharp rise in inflation, a highly volatile stock market and a likely recession” as causes for the staff cuts. Additionally, while employees in Europe will receive “associated compensation”, in the US the layoff process will vary by location.

On the other hand, in this period Klarna does not seem to be living in an optimal situation. Last week the Wall Street Journal reported that the company is looking to raise a new round of funding, which would value the company at $ 30 billion. A figure undoubtedly lower than last year’s $ 46 billion valuation. On the other hand, although the use of BNPL increased towards the end of last year, theunreliability of its customers in such a volatile economy it is probably one of the reasons these services are suffering. As we have already said, 43% of Gen Z users who use BNPL services admitted that they have not paid at least one installment.

A report from Fox Business, on the other hand, indicates that approx 30% of BNPL customers as a whole they struggle to pay back what they owe, and the current state of inflation doesn’t help. As a result, services like Klarna cannot monetize if the situation is the one just described. But despite declining valuation and layoffs, Siemiatkowski told employees that “Klarna continues to hold a strong position in the market.” And he said he was still “inexorably optimistic about the future”.

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