Company Replaces Customer Support With AI, Then Panics and Forces Engineers to Work the Phones as the AI Fails

"The Swedish company was an early adopter of "AI agents," a broad term for machine learning software that's supposedly capable of handling complex computer tasks on its own. There's just one wrinkle: even the best AI agents remain horribly inefficient, and Klarna has all but bet the farm on their success. That's not an exaggeration - after rolling out AI to replace his customer service department in 2024, Klarna CEO and founder Sebastian Siemiatkowski bragged that he hadn't hired a human in a year, because AI was doing the work of " 700 full-time agents.""

"Perhaps unsurprisingly, that quickly backfired. In May of 2025, Klarna started scrambling to hire back the full-time workers and contractors it had confidently axed. But as it turns out, hiring a whole department's worth of staff is a lot harder than firing them. In order to refill its ranks, the company has started forcing software engineers and marketers over from their highly specialized roles into call centers, according to Business Insider."

"Of all the startups that have come and gone, the personal finance company Klarna might be one of the best bellwethers for the finance industry overall. Specializing in "buy now pay later" microloans - tiny cash advances for purchases that don't need to go through a bank - Klarna hit app stores at a time when US consumer debt was climbing toward a record high. Now a giant of the personal finance landscape, the billion-dollar company recently reported a jaw dropping 17 percent default rate on its loans, a number which finance experts warn is a bad omen for consumer debt more broadly."

Klarna, a major buy-now-pay-later lender, grew amid rising US consumer debt and now faces a 17 percent default rate on its loans. The company aggressively deployed AI agents to replace human customer service, with leadership claiming AI performed the work of " 700 full-time agents." That automation effort faltered, leading to an urgent May 2025 campaign to rehire workers and redeploy specialized staff into call centers. Leadership has shifted strategy toward emphasizing human availability. The episode highlights operational limits of current AI agents and signals broader risks for consumer finance and automation strategies.

Read at Futurism