Klarna will now lay off 10% of its staff to buy, later paying uncomfortable money

Buy now, pay later Products like Clarin have become hugely popular in the Covid epidemic.

Noam Galai | Getty Images

Klarna plans to cut about 10% of its global workforce, buy now, pay the company later to name the latest major technology to announce job layoffs.

Klaner CEO and co-founder Sebastian Simetkowski made the announcement to his staff in a pre-recorded video message Monday. The “huge majority” of Klarner employees will not be affected by these measures, he said, but some will be informed that they are being fired.

“When we set our business plan for 2022 in the fall of last year, it was a very different world than the world we are in,” Simiatkowski said.

“Since then, we have seen a tragic and unnecessary war in Ukraine, a change in consumer attitudes, a sharp rise in inflation, a volatile stock market and a potential recession.”

Workers in Europe will be offered unnecessary packages, including “corresponding compensation”, Clarner’s boss said, adding that the process will “look different” for other workers depending on where they work. Clarna says “soon,” Siemiatkowski will share more information with staff about the changes.

The Swedish payment giant currently has more than 6,500 employees worldwide.

Buy now, pay later, such as Klarna’s services, which allow buyers to spread the cost of purchases in interest-free installments, became extremely popular as online shopping accelerated during the Kovid epidemic.

But investors are worried about the sustainability of the sector’s growth as consumers tighten their purse strings amid rising inflation and rising borrowing costs. Affirm, the largest BNPL provider in the United States, has lost nearly three-quarters of its market value since the beginning of the year.

Media reports last week said Clarna was about to lose a third of her valuation in the new round of funding, following the announcement of the cuts. The privately held company, led by Softbank, was valued at $ 46 billion.

A spokesman for Clarner said the company did not comment on market speculation.

Simiatkovsky said Clarner’s decision to reduce staff was one of the “toughest” decisions in the company’s history, but that it would have to be “laser-focused, which would really help us move forward.”

“It’s important to stay calm in stormy weather, not to look away from reality,” he said.

“What we see in the world right now is not temporary or short-lived, and so we need to act.”

Many technology companies that thrived during the Kovid epidemic are now taking steps to reduce costs due to concerns in the sector due to concerns over rising interest rates and rising market liquidity. Recruitment speeds between Facebook’s parent Meta and Uber are slowing, while Netflix and Robinhood have announced job cuts.

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