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Klarna ( KLAR ) raised $1.37 billion in US IPO, valuing it at $15

bln

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CEO admits lender went too fast on AI, after big job and

vendor

cuts

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Klarna ( KLAR ) now shifting AI use to improving services and

products

By Supantha Mukherjee and Echo Wang

STOCKHOLM/NEW YORK, Sept 10 (Reuters) - After becoming

one of the early adopters in Europe of artificial intelligence,

Klarna ( KLAR ) CEO Sebastian Siemiatkowski says the lender may

have gone too far in using the technology to cut costs at the

expense of service and product improvement.

Global companies are racing to harness AI to help them

improve efficiency, lower operational costs and enhance

decision-making, but the transition is proving rocky.

Sweden's buy-now, pay-later lender Klarna ( KLAR ) has cut thousands of

jobs, dropped vendors such as Salesforce Inc ( CRM ) and turned

to AI to create marketing campaigns, saving millions but now

realizing it went too fast, too soon.

"We probably over indexed a little bit on that, and then in

the last six months we have been trying to course correct," CEO

Sebastian Siemiatkowski told Reuters from New York on Tuesday.

He added that a major focus was boosting productivity and

improving products for customers and merchants. The remarks were

cleared for publication on Wednesday ahead of the company's

listing in New York.

Klarna ( KLAR ) raised $1.37 billion on Tuesday in its U.S. initial

public offering, valuing the company at $15 billion and setting

the stage for a market debut that could set the trend for

high-growth fintech listings.

Siemiatkowski said last year it had reduced staff to 3,800 from

5,000, with more reductions expected as it leans on AI to handle

customer queries. Its chatbot was already doing the work of 700

staff, cutting average resolution times to two minutes from 11

minutes, the company said.

In May, Klarna ( KLAR ) used an AI avatar of Siemiatkowski to present its

quarterly earnings. It even started a hotline for customers to

talk directly with an interactive AI avatar trained on

Siemiatkowski's real voice, insights and experiences.

The company is now back to hiring people. It has over two

dozen open positions on its jobs portal.

PRODUCTIVITY AND GROWTH

Siemiatkowski said although Klarna ( KLAR ) saved about $2 million by

dropping Salesforce ( CRM ) software in favor of its AI-built data

tools, the savings were insignificant for investors.

"My investors are not going to be cheering, they're going to

look for growth, and they're going to look to what we offer our

customers and how that's doing," he said.

Klarna ( KLAR ), which transformed online shopping with its

short-term financing model, is listing in the U.S. as it is the

company's largest market, where it competes with the likes of

Affirm.

The company still thinks AI can deliver.

"That's definitely not just a cost play... it's going to be

a lot more than that, and it's going to be able to help us

provide better services to consumers and merchants over time."

Klarna ( KLAR ) Chief Financial Officer Niclas Neglen told Reuters.

Siemiatkowski, who owns about 7% of Klarna ( KLAR ), did not sell his

shares in the IPO - the biggest for a Swedish company since

Spotify ( SPOT ).

"The IPO matters a lot for employees, for our shareholders.

It's a little bit like a wedding, it's a big party and then life

goes on, and you get kids and other things happen," he said.