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Klarna CEO says AI can do the job of 700 workers. But job replacement isn’t the biggest issue.

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Fintech company Klarna, which powers e-commerce transactions for some of the world’s most recognizable brands, including Expedia, Macy’s and Nike, is at the forefront of AI adoption. It has integrated artificial intelligence across the company, most notably with an AI chatbot that it recently said does the equivalent work of 700 customer service agents. Klarna, which employs roughly 4,000 people, recently released statistics that show how efficient and effective the tool has been, wading into the thick of sensitive and high-stakes debates about the role of generative AI in business, how humans interact with it and its implications for the future of work. CEO Sebastian Siemiatkowski explains why he is so transparent about AI’s capabilities, and what concerns him most about the new technology. This interview has been edited for length and clarity.

AI’s takeover of human jobs is a touchy topic. Why did you choose to publicly share data on Klarna’s use of AI to replace customer service agents?

We worry in general about the effects this may have on society, so we decided to be upfront about the fact that it has had some amazing outcomes for customers. 

It is currently doing the equivalent work of about 700 full-time [customer service] agents. Klarna does not employ customer service agents ourselves, we use some of the large customer service providers out there. They’re outsourced — they are not employees.

We made the announcement to say the consequence of us launching the technology is we need the equivalent of 700 fewer full-time agents than what we usually use on an average basis. On average, we need 3,000 agents, now we need a little more than 2,000.

We wanted to make policymakers aware that this isn’t something that’s happening in the future, it’s happening now. We think it is critical that society start thinking about this major change.


How to get your resume past AI and in front of a human

04:48

So this isn’t related to the layoffs Klarna conducted in 2022? AI didn’t take those jobs?

In 2022, as a consequence of a change in investor sentiment, we had to reduce the size of our company. We reduced our staff by around 800 people. None of [the people we laid off] were customer service agents. Now, two years later, we are looking at this interesting technology we’ve developed with ChatGPT. These are two totally separate things that have been conflated.

In the short-term, there are no layoffs or implications for employees as a result of us launching this customer service AI chatbot.

What does the chatbot do? How do you measure its success?

It handles two-thirds of our customer service chat inquiries. It’s on par with humans in terms of satisfaction and it resulted in a 25% reduction in repeat inquiries from customers. 

Before we took this live, we already had a co-pilot that helped customer service agents and other employees accelerate their work. This AI actually communicates and resolves customers’ issues on its own. We think it’s important that people are still given the option to speak to a human, but we’re also seeing that people who choose to interact with the AI chatbot are very happy and find it helpful, to the point and effective. It can communicate in 35 languages, so for many immigrant and expat groups, it means a huge improvement in their experience.

In large organizations, less time is spent on what really creates value for employees, customers and shareholders. With AI, it’s the less-productive work that can be taken away. In the best of worlds, everyone who comes into the company will be able to use their creative power to create real value for customers — and not to write an impressive presentation for its CEO. That’s less of a value add; it’s specifically that kind of work I hope to shrink.

Do you worry about it making mistakes or delivering inaccurate information?

One has to remember that unfortunately, it’s not like we humans are perfect. Humans are fantastic but they also make mistakes, either because they didn’t [give a query] proper attention or get training, and it’s not always their fault. The point is, it does happen, especially when doing millions of customers’ inquiries, some aren’t as good as you’d like them to be. 

The key metric we use is making sure it makes fewer mistakes, on average, than humans do. That’s the objective and it’s something we’ve been monitoring very closely. We make sure the AI’s mistakes are less severe and less common.

How has AI changed your approach to hiring, if at all? 

We’ve stopped hiring in the last six months. We’re shrinking as a company, not by layoffs, but by natural attrition. Klarna tries to apply AI across all products and services and work we do. It’s having implications on how many people we need as a company. This is one time that a single product improvement led to a massive reduction in need for customer service agents. 

How do your employees feel about this?

As much as it’s not easy to not talk about it, we want to be honest and transparent and tell people about it because of the implications for society. As far as our own employees go, we have been trying to communicate this internally since we stopped recruiting in October — that we believe this will allow us to do more with less.

Our ambition is to invest more per employee and to see the compensation of existing employees go up as we become a higher-revenue company.

Internally, lots of employees have been excited about AI and are applying it and Klarna, which is known as a leading AI company, which I think makes our workers more attractive to other employers.


How will AI affect CEO jobs?

04:57

How did you reach your estimation of AI’s $40 million in cost savings to Klarna? 

We were buying customer service from suppliers to take care of inquiries. We had an amount budgeted for how much we were going to spend with those suppliers this year. Now, thanks to the technology, we will spend much less. Forty million is the delta between what we expected to spend and what we will actually spend.

What do you think the larger of implications of AI for society will be?

We are sharing this information to pose the question, to society at large, of how we are going to manage this massive change.

From what I’ve heard, it’s less about job security and more about general security, as in, we’ll need electronics IDs to know that we are in fact humans talking to one another. 

Also, while new [AI-related] jobs may be created on a societal level, that’s not a solve for the individual [who is replaced by AI].

The better we as a society can support individuals who may be affected, the more positive a development it will be. The idea is not to stop it; I don’t think that’s right. The question is, ‘What support can we give people who are affected by it?’



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A look at the increased security at Trump’s Butler rally

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A look at the increased security at Trump’s Butler rally – CBS News


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Former President Donald Trump will rally in Butler, Pennsylvania, on Saturday after an assassination attempt unfolded at his July 2024 rally there. Enhanced security measures were put in place, like trailers blocking the line of sight from the shed Thomas Crooks fired from. CBS News political correspondent Caitlin Huey-Burns and CBS News Pittsburgh reporter Jennifer Borrasso have the latest.

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$100 million in federal funds released for North Carolina to rebuild roads, bridges damaged by Helene

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North Carolina’s Helene cleanup efforts begin


North Carolina’s massive cleanup efforts underway more than a week after Helene

01:21

Washington, D.C. – The U.S. Department of Transportation released $100 million in emergency funds on Saturday for North Carolina to rebuild its roads and bridges damaged by Helene. 

“We are providing this initial round of funding so there’s no delay getting roads repaired and reopened, and re-establishing critical routes,” said U.S. Transportation Secretary Pete Buttigieg in a statement. “The Biden-Harris administration will be with North Carolina every step of the way, and today’s emergency funding to help get transportation networks back up and running safely will be followed by additional federal resources.”     

The storm caused rampant flooding that has devastated several towns and killed more than 225 people – with CBS News confirming at least 114 people killed in North Carolina. There was more than 8 inches of rain across the western North Carolina mountains, with some areas seeing more than a foot. 

Hundreds of roads across Western North Carolina remain closed, leading to an increase in air traffic as teams scour the region for survivors by air. Air traffic over Western North Carolina has increased by 300% due to relief efforts since the storm cleared, the Federal Aviation Administration and the North Carolina Department of Transportation.

Mudslides blocked Interstate 40 and other highways in North Carolina and about 400 roads were closed due to damage from Helene. Interstate 40 was damaged at several locations, the Department of Transportation said.  

President Biden visited the Carolinas on Wednesday, surveying the flood damage by air from Greenville, South Carolina, to Asheville, North Carolina. Mr. Biden announced the federal government would cover “100%” of all debris removal and emergency protective measure costs in North Carolina for six months.

The Department of Transportation said these relief funds will allow the North Carolina Department of Transportation to act more quickly to fund eligible repairs to their damaged facilities.   

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Tropical Storm Milton forms in Gulf; forecast to strengthen into hurricane headed toward Florida

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Helene hits Florida, moves over Georgia


Helene is third tropical system in a year to hit Florida’s northeastern Gulf Coast

03:01

Tropical Storm Milton has formed in the Gulf of Mexico and is forecast to strengthen into a hurricane headed toward Florida with possible impacts to its western coast, the National Hurricane Center said on Saturday. Maximum sustained winds are expected to be at 40 mph with higher gusts and Milton is currently moving north-northeast, NHC said in an advisory. 

Milton is forecast to undergo a period of rapid intensification before it makes landfall as a Category 2 hurricane across Florida’s west coast, CBS News Miami reported.  

The forecast comes a little more than a week after Hurricane Helene made landfall in Florida and across the Southeast, killing more than 200 people and causing immense destruction. President Biden on Thursday took an aerial tour of Florida’s Big Bend where Helene struck as a Category 4 storm. Hundreds of people are still missing and Mr. Biden said the work to rebuild will cost “billions of dollars” as communities suffer still without power, running water and passable roads.

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Tropical Storm Milton forms in the Gulf headed toward Florida, forecasters say.

NOAA


Milton is forecast to move across the southwestern Gulf of Mexico through Sunday night then across the south-central Gulf on Monday and Tuesday before reaching Florida’s west coast by the middle of the week, NHC said. Heavy rain is possible in the region starting Sunday into Monday, CBS Miami reported, and more rain and heavy winds will most likely arrive on Wednesday. Hurricane and storm surge watches will most likely be required for portions of Florida starting Sunday, the National Hurricane Center said.

Along with the heavy rainfall, the hurricane center said to expect risks of flooding.  

Residents in the area should ensure they have a hurricane plan in place, the National Hurricane Center said, follow the advice of local officials and check back for forecast updates.



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