Swedish payments group Klarna said last week it had reduced hundreds of jobs and sees more reductions to come as it implements AI to handle customer queries, stating that chatbots can sharply reduce the time taken to resolve issues, reports Reuters.

The company, which said it had swung to a first-half adjusted profit of SEK 673 million (USD 66 million), said its AI assistant was performing the work of 700 employees, reducing the average resolution time from 11 minutes to just two.

Klarna offers “buy now, pay later” (BNPL) services allowing shoppers to make purchases from online retailers and physical stores without paying the entire amount upfront. The company provides services to 150 million active consumers across more than 500,000 merchants in 45 countries. The sector has been criticised in some quarters for encouraging consumers to get themselves into unserviceable levels of debt.

“About 12 months ago, we would have been about 5,000 active positions within the company, and we are now down to about 3,800,” CEO Sebastian Siemiatkowski said in an interview, adding that almost all of the reduction had been achieved through attrition, not layoffs.

“By simply not hiring, which we haven’t done since September … the company is kind of becoming smaller and smaller,” he added.

Average revenue per employee over the past 12 months had increased by 73%, rising from 4 million crowns to 7 million.

“We will continue to not recruit anything other than engineers for a significant time,” he said, adding that the headcount could eventually fall to 2,000, without giving a timeframe.

At the time of a peak valuation of $46 billion in 2021 - on the basis of a fundraising carried out at the time - Klarna was unprofitable with much less revenue and had about 7,000 employees. While total labour costs will come down, Klarna expects to pay significantly more per individual, the company said.