Klarna lays off approximately 10% of its staff

By Amelia Isaacs on Tuesday 24 May 2022

Savings and Investment

The layoffs come a week after reports showed the BNPL giant might take a c.30 per cent valuation cut.

Klarna lays off approximately 10% of its staff
Image source: Sebastian Siemiatkowski/Klarna.

Klarna will be letting go of approximately 10 per cent of its employees, according to CEO and co-founder Sebastian Siemiatkowski.

The news came to the buy now pay later’s nearly 7,000 employees in the form of a pre-recorded message, according to Breakit, that was later shared on the company’s blog.

Siemiatkowski said the company is “highly influenced by [the world]”, so the business plans for 2022 made last autumn were made in a “very different world” and need to be reevaluated.

“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,”  Siemiatkowski said in the message he shared with employees.

“All of which have marked the beginning of a very tumultuous year.”

The news comes after it was suggested last week that Klarna was looking for a new round of investment that could see its valuation brought down by a third as it set out to raise $1bn, according to media reports.

“While crucial to stay calm in stormy weather, it’s also crucial not to turn a blind eye to reality,” Siemiatkowski continued.

“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.”

He said that together they have re-evaluated the “organisational setup” to ensure the company can continue delivering its targets, which has led to approximately 10 per cent of the company’s employees being laid off.

Siemiatkowski said that while the majority of “Klarnauts” will not be affected, some will not be offered a role in the “new organisation”.

All employees have been asked to work from home this week “in consideration of the privacy of the people affected” by the news.

Klarna declined to comment.

Sign up for our newsletters

Your daily 7am download of all things alternative finance and fintech.

Fintech and alternative finance headlines with an exclusive Editor's Note each week. Delivered Monday at midday.

AltFi's new weekly US newsletter breaking down the ins and outs of America's burgeoning fintech sector. Delivered Monday 9am EST/ 6am PST.