Klarna Looks to Cut Jobs, Slow Growth

Months after laying off 10% of its staff and seeing its valuation drop by 85%, buy now, pay later (BNPL) firm Klarna is looking at further job cuts.

A manager at the Swedish company’s internal engineering unit said this week that the company will focus less on growth and have fewer workers by year’s end, Bloomberg reported Friday (Sept. 23), citing unnamed sources.

See also: Klarna’s 85% Haircut Sees BNPL Investors Shooting First, Asking Questions Later

Earlier in the week, Chief Operating Officer Camilla Giesecke had told employees that workers who perform internal support functions would be reduced to accommodate a diminished workforce, according to the report.

“With a leaner organization to support, I have come to the conclusion that we need to restructure the COO domains to mirror the more focused nature of today’s Klarna,” Giesecke said in a memo, per the report.

A Klarna spokesperson told PYMNTS that the restructure will affect fewer than 100 people in a small division of the company.

“During the summer, we appointed a new COO, and it is natural that a new manager makes changes, which is what is happening now,” the spokesperson said.

While the company is routinely moving employees between teams and making adjustments, they are “often small in scale compared to the major change we made this spring, which was prompted by the turbulent environment,” the spokesperson added.

Read more: Klarna to Cut About 700 Jobs Due to Inflation, War

At least 70% of the people who left Klarna at the start of the summer were already in new jobs, the spokesperson said.

In late August, Klarna issued a report on its first half of the year showing that expenses connected to its United States operations and international market expansion, coupled with the integration of new acquisitions and widening credit losses, contributed to a messy six months.

See more: Klarna Faces Growing Pains as Losses Increase

“When we set our business plans for 2022 in the autumn of last year, it was a very different world than the one we are in today,” CEO Sebastian Siemiatkowski said at the time.