Stockholm-based fintech giant Klarna has decided to freeze its hiring practice, due to a pivot towards increased reliance on artificial intelligence tools.
CEO Sebastian Siemiatkowski this week expressed his confidence in the productivity gains achievable through tools like ChatGPT, stating that they can better handle tasks previously carried out by human employees.
Siemiatkowski acknowledged the potential impact of AI on jobs across the economy, emphasising the company's decision to hold back from active recruitment outside of the engineering department.
"There will be a shrinking of the company. We're not currently hiring at all, apart from engineers," he explained, as reported by the Telegraph. He added that the company does not plan layoffs but anticipates a reduction in size over time due to natural attrition.
Klarna, known for its 'buy now, pay later' app, had already faced a period of economic downturn in the tech industry last May, resulting in a ten per cent reduction of its workforce.
This time, however, the company is opting for a hiring freeze rather than layoffs, with Siemiatkowski asserting that, as AI tools can now perform tasks more efficiently, the company will inevitably be requiring fewer employees.
While the CEO did not specify which roles might be replaced by AI, he expressed the company's intention to develop more consumer-facing AI features, envisioning Klarna as a "personal finance assistant."
Will AI make humans redundant in the world of work?
This move seemingly aligns with the broader trend among tech companies to leverage AI for improved efficiency and cost savings, especially in customer-facing roles.
The decision by Klarna follows a broader industry shift, with other major players like IBM and Dropbox also implementing measures to adapt to the transformative potential of AI.
IBM had previously announced a hiring pause for roles that could be replaced by AI, while Dropbox attributed a 16% reduction in its workforce to a strategic shift influenced by AI.
As with many previous trends, what starts in tech tends to migrate to other industries. As such, the impact of AI on employment has sparked concerns among workers, as the fear of job displacement becomes more tangible.
However, innumerable proponents have argued that AI could and should enhance productivity, rather than replacing jobs entirely. Others however, such as controversial tech mogul Elon Musk, have stated the opposite.
He recently stated that humanity will someday live in a world in which the concept of work is redundant. AI is the "most disruptive force in history", Musk told Prime Minister Rishi Sunak at a recent tech summit. “We will have for the first time something that is smarter than the smartest human. There will come a point where no job is needed."