“LVMH Innovation Virtual Insider“
Although BNPL (buy now, pay later) is booming, the difficult global economy continues to pose problems for operators in the sector, and it has emerged that one of the largest operators, Klarna, is to cut 10% of its workforce.
The CEO of the Swedish company has informed his staff of job cuts due to weakening consumer confidence.
The company has about 6500 employees and, as consumer confidence is affected by rising inflation around the world, in addition to the war in Ukraine, the company’s prospects have deteriorated since last fall.
In a blog post after informing staff of the impending cuts, CEO Sebastian Siemiatkowski weighed in.
«When we set out our business plans for 2022 in the fall of last year, the world was very different than it is today. While it is crucial to remain calm in stormy times, it is also crucial not to turn a deaf ear to reality,» Siemiatkowski underlined.
«That’s why we have to act. More than ever, we need to focus on what will really make us successful in the future. Based on this, Klarna’s management has made some tough decisions. Some of the toughest we’ve ever had to make. Together, we have re-evaluated the organization to ensure that we can continue to meet our ambitious goals,» he commented.
«We have made this assessment based on two things. We have the right team that is focused on the right things. And we have the right people in the right place,» he detailed.
Thus, the company intends to lay off about 650 positions and will be contacting the affected staff in the coming days. For the time being, it is not clear where the job cuts will take place.
Klarna is the most prominent name in the booming BNPL segment, with many millions of users worldwide. For example, in Britain alone it has 16 million users and has agreements with a large number of merchants to allow users to pay for their products in installments and interest-free.
The Wall Street Journal has claimed that Klarna is seeking a new round of investment that could bring its valuation down from $46 billion to $30 billion, but the company has called this «pure speculation.» It remained loss-making last year, with operating losses of SEK 6580 million ($689 million/€643 million).
