Klarna shows why empathy still matters in automated customer service

Klarna‘s dramatic shift away from AI-only customer service signals a growing recognition in the tech industry that human connection remains essential, even in the age of artificial intelligence. After initially claiming its AI chatbot could replace 700 human representatives and laying off workers in 2024, the buy now, pay later company is now actively recruiting human agents to ensure customers always have access to empathetic service. This pivot represents a significant course correction in how businesses balance automation with human touch in customer experiences.

The big picture: Klarna is pivoting from its AI-only customer service strategy to a hybrid approach that guarantees human support options for all customers.

• CEO Sebastian Siemiatkowski acknowledged the company had gone too far in prioritizing cost-cutting through AI implementation.
• The firm is now recruiting workers for what Siemiatkowski describes as an “Uber-type customer service setup” with flexible, remote work options.

What they’re saying: Klarna now recognizes the unique value of human interaction alongside AI efficiency.

• “AI gives us speed. Talent gives us empathy. Together, we can deliver service that’s fast when it should be, and emphatic and personal when it needs to be,” said Klarna spokesperson Clare Nordstrom.
• “From a brand perspective, a company perspective… I just think it’s so critical that you are clear to your customer that there will be always a human if you want,” Siemiatkowski told Bloomberg.

By the numbers: Despite the shift, Klarna’s AI assistant continues to handle a significant portion of customer inquiries.

• The chatbot still manages two-thirds of all customer service requests.
• Since launch, response times have improved by 82% with a 25% reduction in repeat issues.
• In February 2024, Klarna reported the AI assistant had taken over two-thirds of customer service chats (2.3 million) in its first month, with average resolution times under 2 minutes.

Expert analysis: The pendulum swing at Klarna offers lessons for the entire customer service industry.

• “The key takeaway is that AI should augment human agents — not replace them,” said Julie Geller, principal research director at Info-Tech Research Group.
• “Initially, Klarna embraced AI with an eye toward cost savings and efficiency — but perhaps underestimated the tradeoff,” Geller noted.

What’s next: Klarna is launching a pilot program to build a new type of customer service team.

• The company plans to hire “highly educated students, professionals and entrepreneurs for a new kind of role that blends frontline excellence with real-time product feedback.”
• One goal is to replace the thousands of customer service workers Klarna currently outsources, according to Siemiatkowski.