The Swedish buy now pay later company Klarna is set to lay off around 10% of its workforce amid a global market turndown.
CEO and co-founder Sebastian Siemiatkowski announced the cuts in a prerecorded video message sent to employees on Monday, according to Swedish tech site Breakit. Klarna's LinkedIn page states that the company has "more than 7,000" employees working across Europe and the US, so the cuts could mean more than 700 job losses.
Last week, the Wall Street Journal and another Swedish tech site, Di Digital, reported that Klarna was looking for a new round of investment, with a suggestion the firm wants around $1 billion of fresh capital. In his message to employees, Siemiatkowski said the company needed to focus on its core business amid the global market turndown.
"We are strongly influenced by the outside world," Siemiatkowski said. "When we set our goals for 2022 in the autumn, it was a very different world than the one we have today."
"That is why we need to act. More than ever, we need to show laser focus on what really makes us successful in the future. Based on this, the senior leadership at Klarna has made some tough decisions. Some of the toughest we've ever had to take. Together, we have re-evaluated the organisation to ensure that we can continue to deliver on our ambitious goals."
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The cuts have been evaluated in two parts, according to Siemiatkowski. The workforce will prioritise the "right team" focused on the "right things" and those people should be in the "right places".
The CEO also said that those affected will be compensated, though he didn't explain how, and that they will be notified in the coming days. All Klarna employees will also be asked to work from home while the company makes the cuts, "in consideration of the privacy of the people affected by these changes".
Klarna's layoffs are not an isolated incident as the tight economic conditions are hitting several tech firms across Europe. UK online events platform, Hopin, which is one of the fastest-growing startups of the last couple of years, let some 138 employees go in February - roughly 12% of its staff. At the time the company said these cuts were about streamlining its business.
