When AI Replaces Humans: A Lesson from Klarna

I wanted to share a recent story that really stuck with me — it’s about Klarna, the fintech giant, and how their big AI move didn’t go quite as planned.

They decided to replace 700 employees with AI across customer service, translation, and marketing. At first, it looked like a huge success — the chatbot was handling two-thirds of customer chats, resolving issues in under two minutes (compared to eleven before). The CEO even said they’d improve profits by $40 million this year.

Sounds impressive, right?

But here’s where it gets interesting — and honestly, a bit worrying. Customers started complaining. The AI couldn’t handle complex or sensitive issues, and people got stuck in endless loops trying to reach a real person. It became frustrating and, let’s be honest, a bit of a mess. Klarna’s CEO later admitted that cutting costs came at the expense of lower-quality service.

They’re now hiring back human agents to fix the problem.

For me, this is a huge reminder that while AI can drive efficiency and save money, it can’t fully replace the human touch, especially when empathy and problem-solving are key.

This is why I believe change management and risk assessment are so crucial in any AI project.

It’s not just about plugging in a chatbot or an automation tool. It’s about making sure the human element isn’t lost in the process.

Because when AI fails, it’s the customer experience — and trust — that pays the price.

What do you think?

Have you seen similar challenges when businesses bring in AI without the right human oversight?

Let’s talk about it.