A year ago, the “Buy now, pay later” financing company Klarna stopped hiring new employees. Now Klarna is encouraging its remaining employees to stay and work harder, promising higher wages related to AI improvements.

“By not hiring, we are simply downsizing,” explained Klarna CEO Sebastian Siemiatkowski. in an interview with Bloomberg on Thursday. 1,000 people have left Klarna since its hiring freeze began last year, leaving 3,500 workers behind.

Siemiatkowski has told employees that as the company's wage costs decrease and its productivity increases thanks to AI, workers will see their wages increase more often.

Related: Klarna says its AI Assistant does the work of 700 people. The company laid off the same number of employees 2 years ago.

“What we have told our employees is that Klarna's total wage cost will shrink, but some of the gain from that will be seen in your salary,” Siemiatkowski said. “So we're going to deliver some of the efficiency improvements that AI provides by increasing the rate at which our workers' wages increase.”

According to Siemiatkowski, as a result of increased wages, employees are more motivated and intrinsic to use AI. They are using it for tasks such as generating images, creating marketing material, performing financial analysis, developing products and interpreting customer service requests, he said.

Siemiatkowski told the Financial Times in September, Klarna aims to reduce its workforce by 2,000 people with a hiring freeze. He said at the time that the employees who stay will use AI to help fill the gaps.

^{Klarna CEO Sebastian Siemiatkowski. Photo: Chris Ratcliffe/Bloomberg via Getty Images}

Klarna has already promoted AI capabilities to replace human labor. IN Februarythe company claimed that its AI customer service assistant did the equivalent work of 700 full-time human agents.

Related: Klarna CEO says AI can help reduce company's headcount by 50%

Klarna has even shown that its CEO can be replaced by AI. Last week, the company used a clone of Siemiatkowski's AI to report recent financial results.

Buy Now Pay Later is booming

Klarna and other “buy now, pay later” services such as Affirm and Afterpay recently had their best day ever, according to a new report.

Adobe Analytics Estimates released Sunday showed shoppers spent a record $991.2 million on buy-now, pay-later Cyber ​​Monday.

Shoppers are also increasingly turning to these services, spending $75.1 billion on buy-now, pay-later in 2023, a 14% increase from the $65.6 billion they spent in 2022.