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Klarna – Company announcement from CEO regarding layoffs
- throwaway5959 4y agoNo longer a part of Klarna’s journey. barf
- Pixeleen 4y agoRight? I missed that part of the sentence, because the first part caught me: the vast majority of Klarnauts won’t be impacted It's not the time to use this made-up name for insiders when you're saying that many of them will soon be outsiders. "Will all the Klarnauts please step forward. Not so fast, Jake."
- nathancahill 4y ago"If you're not against me, don't cross this line. If yes, do. I love you all."
- vmception 4y agoIf you're being fired > The invite will be titled “Meeting regarding your role at Klarna”. lol ouch! They should make it a gamble where everyone has a meeting and you don't know what the outcome will be! But since thats even more resource intensive I would much prefer a mass pre-recorded zoom call over that. I can understand that the former thing has better PR than the latter thing. But I think employed Americans are more adept at the fickle nature of their employment, whereas when the news articles go out about a mass zoom meeting firing, it gets the attention and hot takes from a bunch of more disconnected unemployable Americans and out of the loop people from other developed nations chiming in.
- deleted 4y ago[deleted]
- rmbyrro 4y agoLots of people also criticize mass calls. There's no way to please everyone. Especially in a mass lay-off.
- phphphphp 4y agoRight, a lay-off is a terrible experience for everyone and there’s no “right” way to do it… but there are less awful ways. There’s 7,000 Klarna employees currently wondering if they’re losing their jobs! If they had simply informed everyone immediately, that would be just 10% of the people feeling those feelings. Setting aside employees for a moment, from a company perspective, the harm you’re doing to your organisation by giving everyone a week to worry about being let go is ridiculous, it’s self immolation. Every single klarna employee is, in this moment, thinking about getting a new job. Mass impersonal announcements are brutal, absolutely, but this is even worse.
- christkv 4y agoLike a wheel of fortune with the possibility of winning 12x months of severance pay.
- ushakov 4y agowhy not get more creative? make a fortune wheel with each employee’s name on it and fire anybody who’s got lucky
- aabhay 4y agoWhat does it look like to fire someone in Europe? As an outsider, all I’ve heard is that it looks very different from the US. What does the author mean by ‘associated compensation’?
- throwaway5959 4y ago
- deleted 4y ago[deleted]
- occz 4y agoDepends on the legislation in the country of employment. In Sweden, the law covering this situation is LAS, Lag om Anställningsskydd, The Employment Protection Act.[1] I'm not exactly an expert, but if you're going to lay people off you have to do it based on how long someone has been at the company. Before you can lay someone off for 'lack of work', you're also required to show that this person cannot fill another position at the company. The rules are definitely in favor of the worker in Sweden. [1] https://www.government.se/government-policy/labour-law-and-work-environment/198280-employment-protection-act-lag-om-anstallningsskydd/ https://www.government.se/government-policy/labour-law-and-w...
- jdmoreira 4y agoGiven what I know from recent layoffs at other companies, it's not necessarily like that. There seems to be ways that don't involve seniority
- guerrilla 4y agoThis has been evolving over time. There are exceptions you can make as long as they're compensated. Now those things are negotiated in collective agreements at most places or individual contracts in the rare case.[1] There are also consequences for like if they claim it's a layoff but it's a firing and so on. It's kind of complicated and getting more so. 1. https://sv.wikipedia.org/wiki/Lagen_om_anst%C3%A4llningsskydd#Undantag https://sv.wikipedia.org/wiki/Lagen_om_anst%C3%A4llningsskyd...
- deleted 4y ago[deleted]
- dt3ft 4y agoAround 700 people will be let go (source: https://www.di.se/digital/sparpaket-pa-klarna-sparkar-10-procent-av-alla-anstallda/ https://www.di.se/digital/sparpaket-pa-klarna-sparkar-10-pro...)
- deleted 4y ago[deleted]
- ganoushoreilly 4y agoAnother indicator consumer spending is dropping and costs are going through the roof. This is probably the first of a bunch of layoffs sadly. I expect Finances (Banks / Mortgage providers) are going to be aggressively reducing headcounts in the near future. One side of my family is heavily in that industry and they're all extremely nervous. Sorry for anyone that lost their role, it's always tough to lose a job regardless of the company they worked for. I wish them all success and luck finding their next endeavor.
- jdmoreira 4y agoThis is most likely not related to cash flows. This seems to be a preemptive strategic layoff to cut costs in preparation of tougher times to raise money / higher interest rates.
- datalopers 4y agoKlarna’s income is tied to consumer discretionary spending which is falling off a cliff.
- sharken 4y agoWith COVID becoming just another disease and the uncertainty from the war in Ukraine, it will only be worse from now on for consumer spending. A lasting peace for Ukraine needs to happen before that will change. And with Ukraine not willing to give any territory to Russia, that peace seems very far off. A coup in Russia could change that, but a coup seems very unlikely.
- vinyl7 4y agoThis has nothing to do with Ukraine, and everything to do with inflation and insane increases in the cost of everything.
- codefreeordie 4y ago
- christkv 4y agoSomebody should send the ceo an email with the subject Meeting regarding your role at Klarna
- altdataseller 4y ago“ As much as we may like it to be the case, Klarna does not exist in a bubble” Klarna can only exist in a bubble.
- rvnx 4y agoThe way I read it the first time: "As much as we may like it to be the case, Klarna cannot exist in a bubble (that has exploded)"
- nindalf 4y agoWhy is this? Aren’t credit products something that consumers have used for decades? Is there something about Klarna that makes it unsuitable to use? If you’re talking about securing funding to do the lending, then sure that makes sense. Is that your concern or is it around the business model itself?
- brtkdotse 4y agoNot the OP, but as I see it Klarna need a steady stream of cheap credit to be able to offer their services. If that stream gets less steady and/or less cheap, the whole calculation falls apart.
- schdnFreud 4y ago[flagged]
- atty 4y agoHonestly, what a terrible letter. Did not once say the words layoff or let go. Using phrases like “continue to be part of klarna’s journey”. Good lord, is this a business or a cult? And not a single line about concrete steps they will take to support the layoffs (multi-month severance packages, etc). Hopefully that is what they intend, but as of right now, this is pretty disappointing.
- rvnx 4y agoI feel it's better to use "fired" or "have to leave your job" or "layoff" or "terminate the employment contract" than "let go". Because "let go" is to "allow someone or something to escape or go free" so it implies that you are the owner of the employee and you allow him to leave, just like as an ultimate humiliation he has to have your permission to go.
- nowherebeen 4y agoFired means you did something wrong. Let go means you were let go of your job through no fault of your own.
- nvrspyx 4y agoWouldn't the latter be layoff? I feel like let go can be used for either; a more polite way of saying "fired" or an alternative to "laid off".
- nowherebeen 4y agoIt's an alternative to laid off I think. When I think of let go, I think more contract work or temp workers. They were let go, but they weren't laid off since they weren't permanent employees to begin with.
- cortesoft 4y ago"Let go" and "layoff" seem to be similar euphemisms. Why does it matter which one is used?
- subsubzero 4y agoTerrible communication in that letter, I love brutally honest and to the point communication. Everyone's time is precious don't beat around the bush just say: we are laying off 10% of the companies staff due to macro-economic conditions beyond our control, this coupled with decreased customer spending and hiring like this day would never happen lead us to this decision. Sorry :(
- deleted 4y ago[deleted]
- rmbyrro 4y agoNot everyone would appreciate your style of communication. I, for example, certainly wouldn't. Unfortunately, it would be unfeasible to customize such a letter for each employee...
- zucked 4y agoI don't think you need to be brutal about it, but being more direct would have been better here. Someone else already captured the essence, but this was all over the place and still didn't really convey that 700 people were losing their jobs.
- matwood 4y agoFlowery language is fine, except when talking about money or people's career/job/livelihood (which is really money again). There's also space between what was said in this letter and brutal honesty. It should be concise and clear.
- nowherebeen 4y agoKlarna seems like horrible company to work for from what I have read on HN. IQ test for interviews, mass layoffs with little self awareness, and very low pay compared to the US.
- buro9 4y agoA horrible company for consumers too. Take those who can least afford to purchase something and give them purchasing power that they don't have and can't get from anyone else.
- nowherebeen 4y agoYeah, similar to pay day loans. It's predatory.
- o_m 4y agoThey are using a lot of dark UX patterns to trick you into thinking you paid, but then you start receiving late fees because you didn't actually pay them, even if you gave them your credit card information.
- celdon25 4y agoMy company does an IQ test for interviews, but I rank it among the top places I've worked at in my career. Do you have any evidence that IQ tests are only done by companies that are bad places to work at?
- Melchizedek 4y agoIt's the other way around. I've worked for a company that did (de facto) IQ tests before hiring. It was great. Everyone was intelligent, thoughtful and efficient and the company was successful. The problem was the owners (who of course had not taken any test). They were a mix of crazy and stupid, and the staff had to continuously work around them.
- amandare 4y ago
- phphphphp 4y agoThe worst possible way to handle it: 1. Tells everyone that they’ll get an email in the next few days about whether or not they’re to be fired — days of anxiety ahead for everyone, and even those who aren’t being let go will be looking for new roles 2. Asking everyone to work from home, so those who are let go are isolated from their peers who they very probably want to commiserate with and say goodbye to What a terrible self-inflicted error.
- madamelic 4y agoYeah, #2 definitely feels the worst imo. Not knowing who will be there when you get back, having to go into the office with the anxiety of having to be the survivors even if it is only 10%. With that said, it's a lose-lose. Layoffs suck. It sucks to know what is happening and see people led off, just like it sucks to be the one led off with the psychologically long walk to the meeting room.
- hn_throwaway_99 4y ago> 1. Tells everyone that they’ll get an email in the next few days about whether or not they’re to be fired — days of anxiety ahead for everyone, and even those who aren’t being let go will be looking for new roles I love how half of the people will bitch that layoffs happened too suddenly without adequate warning, and the other half will bitch that they were given too much heads up.
- phphphphp 4y agoLayoffs are hard. People will be upset no matter what. The responsibility of leadership is to make hard decisions that have the best outcome. Telling 7,000 people they might be laid off this week and so they must stay home so that the company can say “we did a personal call with each person being laid off” is an order of magnitude worse than just sending everyone an email today. People will be upset regardless, a good leader optimises for the well-being of their people, and this approach does not do that.
- tejohnso 4y ago> However, unfortunately, some of you will be informed that we cannot offer you a role in the new organization What new organization? They're laying off ~10%, not restructuring the whole business, or creating a wholly owned subsidiary, or even repositioning their product. Is there some kind of legal advantage being exploited here?
- mingusrude 4y agoThere can be, laying off people in Sweden is hard and one of the ways to do it is to claim that there is no work for an employee and so doing a reorganization can make it easier to claim that. Sweden's also got fairly strict last-in-first-out rules when firing. The way the company is organized affects whether two employees are in the same "circle" and compare to one another.
- searchableguy 4y agoWhat is a last in first out rule?
- floren 4y agoLayoffs start from the most-recently-hired employee and work back by seniority.
- searchableguy 4y agoThis is required by government and why?
- sofixa 4y agoTo avoid companies laying off the most experienced employees and replacing them with new grads to lower costs as a regular practice. There are ways of doing it, it's just slightly more complicated than just doing it directly.
- mittermayr 4y agoI think it's sad to see a CEO who doesn't seem to care all too much about hiding the fact that it isn't just the Ukraine, inflation, and it probably isn't the recession that is demanding this. It's everything he and his team did leading up to this. A convenient way also to use points at everything around us to justify a trim and rebalance of the culture and operating cost. I always felt that good CEOs (from a culture perspective) make it clear that in times of trouble, the first priority is not the business, but everyone working there. Sure, all that won't matter if the business folds, but Klarna is a long way from crashing and there's a hundred and one firms out there ready to pay up to keep this going.
- dannyw 4y agoNo, the reason why lay-offs are happening is exactly because of inflation and the likely upcoming recession.
- mittermayr 4y agoI accept your opinion, of course, but I think those are (for now) merely convenient side effects helping certain companies take care of more severe trimming that has been long overdue but tricky to time and communicate.
- native_samples 4y agoIndeed. It would have been nice if he had named the actual causes of the problems though. Inflation did not take off with the war in Ukraine, that's a red herring. Klarnauts are losing their jobs because of the knock-on effects of lockdowns, other COVID counter-measures and the massive quantity of money printing required to keep things going during that process. Printing so much money inevitably creates inflation. However it seems the CEO is too chicken to spell it out and prefers to point the finger of blame elsewhere.
- hn_throwaway_99 4y agoBizarre. People expect either (a) company management to be completely clairvoyant about what the future will hold, or (b) when their best estimates about the future change, I guess folks expect management just continue charging ahead until their company goes bankrupt. I also totally disagree with this statement, if you're implying that you think good CEOs should layoff as few people as possible: "I always felt that good CEOs (from a culture perspective) make it clear that in times of trouble, the first priority is not the business, but everyone working there." If anything, I think good CEOs are clear about making tough, painful decisions, and they make them quickly and move on as fast as possible. There is nothing worse than everyone seeing the writing on the wall (e.g. lots of people with not enough work to do), but feeling that management is paralyzed by fear to change it. What's going on is really not that complex. Companies (and MANY companies, certainly not just Klarna), planned for number of employees based on estimates about the future state of the world, and that future state of the world turned out to be drastically impacted by all the events mentioned in that letter.
- physicsguy 4y agoHigh interest rates mean it’s no longer profitable to charge no interest?
- Yhippa 4y agoA decimation is a nice, even percentage to use when getting rid of people, dating back to the Roman armies.
- sam_lowry_ 4y agoHa-ha... days ago this dude was in the top pick of the most influential tech figures list in Politico EU [1]. 1. https://www.politico.eu/tech-28-2022/ https://www.politico.eu/tech-28-2022/
- 40acres 4y agoKlarna feels like a feature to me, not a self sustaining business. I don't know what other capabilities they provide for merchants but I don't think BNPL can stand on its own, especially in a downturn.