May 23, 2022

Klarna lays off 10% of its team amid valuation crunch

The buy now, pay later giant Klarna is laying off around 10% of its workforce around the world, CEO Sebastian Siemiatkowski announced today

Mimi Billing

2 min read

Sebastian Siemiatkowski, Klarna CEO

The Swedish buy now, pay later company Klarna is about to lay off 10% of its workforce, according to the CEO and cofounder Sebastian Siemiatkowski. LinkedIn shows that the company has more than 6,500 employees.

In a prerecorded video message, shared with employees today at 4pm CET and seen by Swedish tech site Breakit, Siemiatkowski says that the layoffs are mainly due to market constraints.

“We are strongly influenced by the outside world. When we set our goals for 2022 in the autumn, it was a very different world than the one we have today," he said. 


Valuation crunch

Last week, the Wall Street Journal reported that Klarna was seeking a new round of investment that could see its valuation brought down by a third, from $46bn to $30bn. According to the newspaper, the goal was to raise as much as $1bn of fresh capital.

Amid the global market downturn, it needs to focus on its core business, Siemiatkowski told staff today.

“That is why we need to act. More than ever, we need to show laser focus on what really makes us successful in the future. Based on this, the senior leadership at Klarna has made some tough decisions. Some of the toughest we've ever had to take. Together, we have re-evaluated the organisation to ensure that we can continue to deliver on our ambitious goals.

👉 Read: Klarna's valuation history: explained

“We have done this evaluation based on two things. We have the right team that focuses on the right things. And we have the right people in the right place.”

Siemiatkowski also said that the people who will have to leave the organisation will be compensated — though it's unclear how. Who will have to leave will be communicated in the following days, he added. Klarna employees have been asked to work from home this week “in consideration of the privacy of the people affected by these changes".

Layoffs in European tech

As economic conditions bite, a number of Europe’s other big tech companies have laid off significant numbers of staff in the last few months. Online events platform Hopin, headquartered in London, let 138 employees go in February — equivalent to 12% of its staff. 

Last week, Swedish healthtech company Kry confirmed it was letting 10% of its employees, which equates to 100 people. 

Mimi Billing

Mimi Billing is Sifted's Europe editor. She covers the Nordics and healthtech, and can be found on X and LinkedIn