Company acknowledges AI shortcomings in customer service, recalls human staff

After halting recruitment in 2023 and increasing reliance on artificial intelligence, Swedish fintech firm Klarna has admitted that AI failed to deliver customer service at the level of human agents, prompting a renewed emphasis on human contact.

Klarna, known for its "buy now, pay later" service, partnered with AI in 2021 to automate operations and reduce costs. It deployed generative AI agents for customer support, translation, art production, and data analysis, reportedly saving $10 million in 2023.

However, Klarna CEO Sebastian Siemiatkowski recently acknowledged that AI did not meet the quality standards of human customer service agents.

He stated, “We used AI in customer service, but upon reviewing the results, it became clear that direct human interaction holds far more value.”

From a branding perspective, he emphasized the importance of assuring customers that a human agent will always be available if needed, adding that AI has not yet delivered the quality they aimed for.

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During this shift, Klarna’s workforce shrank from 5,527 full-time employees in late 2022 to just 3,422 by December 2023, reflecting a significant reduction in headcount.

Despite its ongoing AI integration, the company has recognized the indispensable role of human workers and plans to maintain a balance between automation and human interaction going forward.

Klarna is not alone in this trend. Other global firms like CrowdStrike and Duolingo have also reduced their workforce after integrating AI into their operations. CrowdStrike cut 5% of its staff, while Duolingo began phasing out contractors for tasks now managed by AI.