Buy now, pay later service provider Klarna aims to cut nearly half of its workforce over the next few years thanks to efficiencies derived from investments in artificial intelligence.
The company has cut its workforce from 5,000 to 3,800 over the past year and hopes to get to 2,000 employees by using AI for marketing and customer service.
Managing Director Sebastian Siemiatkowski told the BBC that the job cuts would allow Klarna to pay higher salaries to its remaining staff.
But he predicted AI would have a “dramatic impact” on employment and society, and said governments needed to think about what to do about it.
“I think politicians should start today thinking about whether there are other effective ways of supporting people,” he told BBC Radio 4's Today programme.
He said it was “overly simplistic” to simply say new jobs would be created in the future.
“I mean, you could be an influencer, but it's hard to do that when you're 55,” he said.
The recent widespread adoption of AI has brought attention to its benefits and risks.
The International Monetary Fund said earlier this year that AI will affect around 40% of all jobs and is “likely to exacerbate overall inequalities.”
In other sectors, such as the games industry, developers have warned that AI is already taking their jobs.
Klarna, which is based in Sweden and has two offices in the UK, published interim results showing a 27% rise in revenue to 13.3 billion Swedish kronor (£990 million) and revealed plans to cut staff.
“Our investments in AI have enhanced our proven efficiencies at scale, reduced operating expenses and improved gross margins,” the company said.
Labor unions have warned that the development of AI will lead to mass job losses and are calling for legislation to protect workers.
Mr. Simiatkowski said Klarna would make the cuts through what is known as “natural attrition,” which is effectively a hiring freeze without replacing staff who leave.
This usually means more work for those who remain.
But Simiatkowski argued that AI will replace these jobs, and even argued that for some people it could be a “positive development” as they could command higher salaries.
He said it was “important” for the Government to consider what to do about people who have lost their jobs, but suggested businesses such as his “can't stop the progress”.
“It is important that Europe and democracies are ahead in the evolution of AI,” he said.
Klarna is expected to cut its workforce ahead of its planned listing on a stock exchange that has recently been dominated by companies that have made big investments in AI, such as Nvidia and Microsoft.
This means that Klarna will be seen as a strong advocate of the technology, which could make its shares more attractive to investors when it eventually goes public.
