Buy Now, Pay Later (BNPL) firm Klarna has revealed it lost about £500 million (SEK 6.2 billion) in the first half of 2022.

The figures come months after the Buy Now, Pay Later (BNPL) firm saw its valuation drop by 90 per cent after a $800 million funding round.

The company said that the losses were driven by an increase in employee costs and credit losses as a result of its market expansion, as well as continued investment in the business.

Following its latest funding round, Klarna admitted that it had not been immune to “significant downdrafts” of FinTech stock in public markets.

In a statement to shareholders, Klarna’s chief executive Sebastian Siemiatkowski said that the business would tighten its approach to credit losses and sometimes lend less to consumers, particularly to new customers.

The chief exec also mentioned the company’s decision to cut its workforce by 10 per cent earlier this year because of the current volatile economic environment.

“We’ve had a few years now where growth has been really heavily prioritised by investors,” Siemiatkowski told investors. “Now, understandably, they want to see profitability. We’ve had to make some tough decisions, ensuring we have the right people, in the right place, focused on business priorities that will accelerate us back to profitability while supporting consumers and retailers through a more difficult economic period.”

In May, the BNPL business said it would drop around 700 jobs, despite the company introducing a worldwide hybrid working policy earlier in the month and saying that the pandemic had proven significant growth and success could be achieved with flexible working.

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