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\n

Klarna, the Swedish \u201cbuy now, pay later\u201d service (BNPL), announced that it\u2019s laying off 10 percent of its global workforce in a prerecorded video message, according to reports from Protocol<\/em><\/a> and TechCrunch<\/em><\/a>. The company currently has about 7,000 employees<\/a>, and a 10 percent cutback puts the number of affected workers somewhere around 700.<\/p>\n
BNPL services like Klarna, Affirm, and Afterpay allows users to purchase a product for nothing or a small fraction of its full price. Customers can then make incremental payments over a set period of time but will face a typically interest-free fee for any late payments. BNPL businesses soared at the height of the pandemic<\/a> when many people were strapped for cash and had nothing else better to do than shop online.<\/p>\n
Klarna CEO Sebastian Siemiatkowski delivered the news to employees in a prerecorded video message<\/a>, citing \u201cthe war in Ukraine unfold, a shift in consumer sentiment, a steep increase in inflation, a highly volatile stock market and a likely recession\u201d as the reasons behind the layoffs. Siemiatkowski explained that workers in Europe will receive an \u201cassociated compensation\u201d but added that the severance process for employees in the US will \u201clook different\u201d depending on location.<\/p>\n
\nKlarna\u2019s valuation has suffered a significant dip<\/q><\/aside>\n<\/div>\nLast week, <\/em>The Wall Street Journal<\/em><\/a> reported that Klarna is looking to raise a new round of funding that would value the company at $30 billion, about one-third less than the $46 billion it was valued at nearly one year ago. Rival BNPL service Affirm has also seen a similar dip, with its share price sinking 75 percent this year. <\/p>\n
Although BNPL usage increased<\/a> toward the end of last year, the unreliability of its customers in such a volatile economy is likely part of the reason why BNPL services are struggling. A recent report from Sfgate<\/em><\/a> <\/em>reveals that around 73 percent of its customers are considered part of Gen Z<\/a> (people born between 1997 and 2012), and about 43 percent of them report missing at least one payment. Meanwhile, a report from Fox Business<\/em><\/a> indicates that about 30 percent of BNPL customers as a whole struggle to pay back what they owe, and the current state of inflation<\/a> doesn\u2019t help. BNPL services can\u2019t make money if they don\u2019t get paid back, and that\u2019s what could make it a risky business to run.<\/p>\n
Despite the decreased valuation and layoffs, Siemiatkowski told employees that \u201cKlarna continues to hold a strong position in the market\u201d and says he\u2019s still \u201crelentlessly optimistic about Klarnas\u2019s future.\u201d Other tech companies, including Meta<\/a>, Apple<\/a>, and Snapchat<\/a>, are slowing down hiring, while Netflix has already laid off over 150 workers<\/a>.<\/p>\n<\/div>\n

<\/br><\/code><\/p>\n
Source: https:\/\/www.theverge.com\/2022\/5\/23\/23138602\/klarna-bnpl-service-lays-off-10-percent-workers-economy-falters-video-messages<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"
Source: Klarna, the Swedish \u201cbuy now, pay later\u201d service (BNPL), announced that it\u2019s laying off 10 percent of its global workforce in a prerecorded video message, according to reports from Protocol and TechCrunch. The company currently has about 7,000 employees, and a 10 percent cutback puts the number of affected workers somewhere around 700. BNPL […]<\/p>\n","protected":false},"author":1,"featured_media":6464,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","om_disable_all_campaigns":false,"pagelayer_contact_templates":[],"_pagelayer_content":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[15,8],"tags":[16],"class_list":["post-6463","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-policy","category-technology","tag-policy"],"yoast_head":"\nKlarna used a prerecorded video message to lay off 10 percent of employees - Science and Nerds<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/scienceandnerds.com\/2022\/05\/24\/klarna-used-a-prerecorded-video-message-to-lay-off-10-percent-of-employees\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Klarna used a prerecorded video message to lay off 10 percent of employees - Science and Nerds\" \/>\n<meta property=\"og:description\" content=\"Source: Klarna, the Swedish \u201cbuy now, pay later\u201d service (BNPL), announced that it\u2019s laying off 10 percent of its global workforce in a prerecorded video message, according to reports from Protocol and TechCrunch. 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