Klarna CEO says AI could cause a white-collar job crisis and recession

When Klarna announced in 2024 that its AI assistant could handle the work of 700 customer service agents, it made headlines as one of the earliest real-world examples of large-scale job automation. Now, a year later, Klarna CEO Sebastian Siemiatkowski is raising the alarm himself: artificial intelligence might not just be replacing roles, it could be putting the global economy at risk. Speaking on The Times Tech podcast, Siemiatkowski said, "There will be an implication for white-collar jobs," warning that such a shift "usually leads to at least a recession in the short term." Siemiatkowski added: "Unfortunately, I don't see how we could avoid that, with what's happening from a technology perspective."advertisementKlarna, best known for its "buy now, pay later" services, has been at the forefront of AI adoption. The company partnered early with OpenAI to roll out an assistant that has now handled over 2.3 million customer queries. The automation helped the company reduce its headcount from 5,500 to 3,000 employees over the last two years. While the move boosted Klarna's revenue per employee and lowered costs, it also highlighted a difficult truth: AI doesn't just improve efficiency; it removes the need for humans in many roles.Siemiatkowski has been among the few tech leaders willing to speak openly about AI's potential to eliminate jobs. "I want to be honest, I want to be fair, and I want to tell what I see so that society can start taking preparations," he said.advertisement
But in a candid speech at Klarna's headquarters in May, the CEO admitted the company may have overcorrected. "From a brand perspective, a company perspective, I just think it's so critical that you are clear to your customer that there will always be a human if you want," he said. And so, last month, Klarna decided to shift back a little. The company started recruiting human agents again, testing a flexible, remote support model where agents can log in as needed – much like ride-share drivers do."Two things can be true at the same time," Siemiatkowski told a London SXSW audience last week. He believes AI is still crucial for handling repetitive or "boring" tasks, but human interaction remains essential for empathy and nuanced communication.This balancing act reflects a wider industry trend. Tech leaders like Google's Sundar Pichai and Microsoft's Satya Nadella have all noted that AI now writes around 30 per cent of their companies' code – and in the case of Meta CEO Mark Zuckerberg, the company may soon (in about 18 months) start to use AI to write 100 per cent of code. Zuckerberg has also said that AI is already equal to a mid-level engineer and could soon outperform even top coders. OpenAI's Sam Altman recently claimed that AI generates 50 per cent of the code at some firms, and Anthropic CEO Dario Amodei predicted that by the end of this year, all code will likely be AI-written.advertisementMeanwhile, companies like Duolingo and Shopify are laying off human staff and replacing them with AI. Shopify now requires managers to prove that a task can't be done by AI before hiring a person.Still, not all industry voices believe the outcome has to be dire. Demis Hassabis, CEO of Google DeepMind, advised teenagers to embrace AI as the defining tech of their generation. At Google I/O, he said the industry could create "more valuable, usually more interesting jobs," even if old ones disappear. He emphasised skills like adaptability and creativity as essential for future-proof careers.For Siemiatkowski, the short-term outlook remains grim. He believes CEOs have been downplaying the economic risk posed by AI. "I don't want to be one of them," he said.

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