Klarna reported a net loss of $99 million in the first quarter of 2025, nearly doubling its loss from the previous year, primarily due to one-off costs. Despite a 13% increase in revenues to $701 million and a growing user base, the company has paused its U.S. IPO plans amidst market instability influenced by recent tariff policies. CEO Sebastian Siemiatkowski noted a significant reduction in headcount, attributed in part to AI investments.

Klarna has partnered with Google Cloud to leverage artificial intelligence, aiming to enhance shopping experiences for millions of users worldwide. This strategic collaboration focuses on creating more engaging and creative interactions between consumers and brands through advanced AI technologies.

Klarna has shifted its focus from AI-driven customer service solutions back to human agents as part of a strategy to enhance customer experience. The decision comes amidst growing concerns about the effectiveness of AI in handling complex consumer issues and aims to restore trust in the company's support system.

Klarna CEO Sebastian Siemiatkowski announced a 40% reduction in the company's workforce, attributed to investments in artificial intelligence and natural attrition. The fintech firm has embraced AI tools, significantly enhancing productivity, but also plans to hire more human customer service agents to maintain service quality. Despite a hiring freeze, Klarna continues to advertise open positions and is preparing for its long-awaited IPO.