Klarna to cut 10% of staff

Klarna has announced it is cutting its workforce by 10 per cent in response to a “volatile economic environment”.

The move comes despite the company introducing a worldwide hybrid working policy earlier this month, after it said the past two years had “proven” that significant growth and success can be achieved with flexible working.

In its latest financial results, Klarna said that although it had experienced strong growth across the business it needed to “consolidate and capitalise” amid the backdrop of the current economic and geopolitical climate.

The Buy Now, Pay Later (BNPL) firm, which currently has 7,000 staff, will lay off 700 staff in a pre-recorded video message, according to a report by The Verge.

“We have revisited our 2022 plans and will implement a number of prudent and pre-emptive measures to meet these evolving challenges,” said the company in its latest financial statement.

It continued: “As part of this, we have carefully assessed our organizational needs for the future to deliver on these very targeted priorities which will unfortunately mean c.10 per cent of Klarna colleagues leaving the company, as well as tighter controls on our cost base.”

In the company’s first quarter financial results it reported that e-commerce growth was down by three per cent, while global gross merchandise volume was up 19 per cent.

The company said that its revenue take rate is “stable”, with operating income up 20 per cent to $381 million.

In March, the business recorded credit losses of $542 million for last year.

“What we are seeing now is not temporary or short-lived, and hence we need to act,” said Sebastian Siemiatkowski, chief executive, Klarna.

“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.”

“We have re-evaluated our organisational setup to make sure we can continue to deliver on our ambitious goals.

“It saddens me to say that as a result of this, a number of colleagues and friends across the company will be impacted.”

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