The CEO of Klarna, Sebastian Siemiatkowski, has issued a stark warning for the future of work in an AI-driven economy. He predicted that the accelerating pace of AI adoption could trigger a short-term recession.

And white-collar workers will be bearing the brunt.

“My suspicion … is that there will be an implication for white-collar jobs. And when that happens, that usually leads to at least a recession in the short term,” he said on The Times Tech Podcast. “Unfortunately, I don’t see how we could avoid that with what’s happening from a technology perspective.”

Klarna, one of Europe’s largest fintech companies, offers a telling case study of this transformation. Over the past two years, the Swedish ‘buy now, pay later’ (BNPL) giant has seen its workforce fall from 5,500 to 3,000.

There are plans to trim it further to around 2,000 through what Siemiatkowski refers to as “natural attrition”.

Behind that benign phrasing lies a bold pivot to automation.

In February, Klarna replaced 700 outsourced customer service roles – previously handled by staff at French firm Teleperformance – with an AI chatbot. The shift was emblematic of the broader trend of intelligent automation stepping in to manage routine interactions at scale.

A ‘seismic economic event’ in the making

Siemiatkowski is not alone in his assessment. He revealed that he frequently receives messages from fellow CEOs keen to compare notes on streamlining operations through AI. “If you added up the number of employees of the CEOs who had called me,” he said, “the result could be a seismic economic event.”

This convergence of efficiency-seeking leaders could spell trouble for economies still adjusting to post-pandemic labour market dynamics.

White-collar roles – once considered shielded from automation – are now firmly in AI’s crosshairs.

As companies in tech and beyond jump on the automation bandwagon, the potential for widespread job displacement looms large.

Anthropic CEO Dario Amodei echoed similar concerns, predicting that up to 50% of white-collar jobs could disappear by 2030, with unemployment spiking by 10% to 20% within five years.

Not everyone shares this bleak outlook. Google CEO Sundar Pichai has offered a more optimistic take, saying that when AI displaces roles within Alphabet, the company often retrains and promotes the affected staff rather than letting them go. But Klarna’s model suggests that not all companies can – or will – take that route.

The human touch still matters

Despite the aggressive automation drive, Klarna has not entirely turned its back on human talent.

In a telling twist, the company began hiring customer service staff again in May, just months after the chatbot rollout. Why the reversal?

The AI, while efficient, was delivering what Siemiatkowski described as a “lower quality” output for more complex queries.

We realised that there will be a higher value to human connection,” he said.

The experience highlights a growing theme in AI transformation: while bots can handle the basics, human nuance still matters – especially in service-driven industries.

Rather than replace humans wholesale, AI may ultimately reshape roles, demanding higher-order skills, deeper empathy, and greater adaptability.

It’s a case of “doing more with less,” as Siemiatkowski puts it.

Those who remain will be expected to work alongside AI tools, leveraging them to increase productivity. For HR leaders, this signals an urgent need to reimagine job design, reskill employees, and prepare for a workplace where humans and machines operate in tandem.

Credit losses and consumer sentiment

Beyond workforce changes, Klarna’s financials offer another lens into how macroeconomic turbulence might play out. In 2023, the firm reported a 17% rise in credit losses to US$136 million – a figure tied to increased customer onboarding.

Siemiatkowski brushed off the increase, saying it was proportional to the growth in users and that Klarna remains relatively “unsensitive to macroeconomic shifts”.

Unlike traditional banks, Klarna’s users carry modest balances – around £100 on average, compared to $6,300 in credit card debt in the US. This low exposure model, Siemiatkowski argued, means defaults are less likely unless there’s a sharp rise in unemployment.

Still, consumer confidence is showing signs of fatigue. While there’s no official declaration of a downturn yet, Siemiatkowski pointed to declining sentiment as a canary in the coal mine.

Making future statements about macroeconomics is like horoscopes,” he said.

The CEO, however, stressed that AI-induced job losses could sap consumer spending power, setting off a chain reaction that hits businesses like Klarna hard.

BNPL firms, in particular, rely on customers having discretionary income – and that dries up quickly when paycheques vanish.

The cost of creative destruction

In a conversation that was as much cautionary tale as it was forecast, Siemiatkowski positioned himself as both architect and sceptic of the AI revolution. He openly admitted that Klarna had volunteered to be OpenAI’s “favourite guinea pig” back in 2023 and pushed the envelope on automation. Yet he has been equally candid about the risks.

“Many people in the tech industry, especially CEOs, tend to downplay the consequences of AI on jobs,” he said.

I don’t want to be one of them.

His remarks reflect a rare honesty among tech leaders – a recognition that disruption, even when profitable, comes with a price tag for society. For business and HR leaders, the challenge now is to strike the right balance in embracing the productivity gains AI offers while managing the fallout for workers.

Implications for HR and workforce strategy

The repercussions are vast. Talent leaders will need to prepare for a future where reskilling is no longer a nice-to-have but a necessity. Workforce planning will involve not just filling roles but redefining them. And in a labour market where AI does the heavy lifting, the human advantage will lie in creativity, communication, and complex problem-solving.

Moreover, if the recessionary scenario plays out, companies may be forced to rethink how they support displaced workers.

Redundancy payouts and outplacement services will not suffice.

What’s needed is a forward-looking approach to employability in the age of AI. In short, while AI may be the engine of tomorrow’s growth, it could also be the trigger for today’s downturn.

Business leaders would do well to heed the warning signs. When the machines come for the middle class, the ripple effects won’t stop at the office door.