Klarna is laying off around 650 employees worldwide: On May 23, Sebastian Siemiatkowski, CEO and co-founder of the Swedish financial services provider, announced the dismissal of a tenth of the approximately 6,500 Klarna employees.
The international situation is forcing Klarna to make layoffs
The report for the first quarter was published on the same day – in it Siemiatkowski explains: “When we formulated our business plans for 2022 last autumn, it was a completely different world than the one we are in today. Since then we have [den Beginn] a tragic and unnecessary war in Ukraine, a shift in consumer sentiment, a spike in inflation, an extremely volatile stock market and [den Anfang] of a probable recession.” Addressing the affected employees of the Buy Now, Pay Later (BNPL) company, he expresses his gratitude for their work and contribution to the company’s success.
Loss of value: Investors unsettled by lower consumption
A week before this announcement, there was speculation in the media that Klarna would be valued 33 percent worse in a new round of financing than in the last round ($46 billion). This is reported by CNBC. When asked, a Klarna spokesman said the company did not comment on market speculation. According to CNBC, the reason for such a drop in value is that investors are unsettled by less active consumers. The same could be said of Affirm, the largest BNPL company in the US, whose shares are down nearly three-quarters of their value year-to-date.
Siemiatkowski told CNBC, “While it’s important to remain calm in turbulent times, it’s also important not to close our eyes to reality. What we’re witnessing in the world right now is not temporary or short-lived , and that is why we must act.” The affected employees in Europe should receive a severance payment, in other regions the layoffs would be organized differently. According to CNBC on May 23, Siemiatkowski wants to pass on more information to employees “very soon”.
Netflix and Robinhood are also laying off staff
Klarna is not the only big company cutting jobs: After Netflix lost more subscribers than it gained in the first quarter of 2022, the video streaming provider is apparently also facing layoffs. According to the press release, the reason for the declining number of subscriptions is inflation and the Russian war of aggression against Ukraine. According to CNBC, Robinhood employees are also being laid off, while Meta and Uber are hiring fewer new staff.
Olga Rogler / Editor finanzen.net
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