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The layoffs at Klarna

blog.pragmaticengineer.com

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Re: The layoffs at Klarna

#21

Post by foepys »

logifail wrote: post #7
Areading314 wrote: post #3

Klarna generated $1.42 billion revenue in 2021, a 32 percent year-on-year increase. A majority of Klarna’s income comes from interchange, processing and merchant fees. As Klarna has expanded its BNPL offering, its losses have increased. It reported a net loss of $730 million in 2021, a 337 percent increase on its 2020 loss. I would say its surprising that this company is still in business at all with numbers like thi…

> As Klarna has expanded its BNPL offering, its losses have increased. It reported a net loss of $730 million in 2021, a 337 percent increase on its 2020 loss Yet the tone from the acticle is that employees appeared to think the company was successful?

Since Uber seems to be a benchmark for VC start-ups (Uber for X) and Uber is still losing money in the tens or hundreds of millions per year, I am not surprised that employees think that Klarna is a success.

Re: The layoffs at Klarna

#22

Post by Ekaros »

speedgoose wrote: post #4

I’m surprised to read that Klarna had 7500 employees. It seems to be a lot for an online payment company offering consumer loans. What were the people doing?

I understand them being somewhat big with customer support and all the debt collection they are likely involved with. But still 7500 is a lot.

Re: The layoffs at Klarna

#25

Post by antupis »

smashah wrote: post #18

I tried to get a big-ticket item using Klarna. Had the money in the bank, just thought I'd give it a go. It failed multiple times without any sort of meaningful error message. Apparently each of those failed attempts hit my credit score. I told them to close my account multiple times through multiple channels (chat/email/etc.) and reverse any damage done to my credit score. Till this day I get monthly balance/stateme…

Yup funny how big they growth becouse they pretty much dont add anything to consumer experience and they are well know issues like if you know social security number you can order stuff.

Re: The layoffs at Klarna

#26

Post by PheonixPharts »

logifail wrote: post #7
Areading314 wrote: post #3

Klarna generated $1.42 billion revenue in 2021, a 32 percent year-on-year increase. A majority of Klarna’s income comes from interchange, processing and merchant fees. As Klarna has expanded its BNPL offering, its losses have increased. It reported a net loss of $730 million in 2021, a 337 percent increase on its 2020 loss. I would say its surprising that this company is still in business at all with numbers like thi…

> As Klarna has expanded its BNPL offering, its losses have increased. It reported a net loss of $730 million in 2021, a 337 percent increase on its 2020 loss Yet the tone from the acticle is that employees appeared to think the company was successful?

At least in tech there are people who have had decade+ long careers where it was very feasible to never work for a company that actually made more money than it spent. I've been at multiple startups that had VCs pressure leadership not to make profit because that would hurt growth of some other KPI of interest (users, revenue etc).

In the last few year many of these people have seen these companies go public, and their imaginary Options/RSUs suddenly turn to liquid assets. Company hasn't started making profits, P/E is negative, but TC has gone up by 50%-200%. That certainly feels like success.

Looking back at my own career the companies that made the least profit (including negative) are the ones that have paid me the most.

I'm old enough to remember the pre-dotcom bust chats of "new economy" and "things are different now", and how all of the stuffy old finance people who thought businesses should make more than they spend where ultimately proven correct.

For many people, even in their late 30s, the ability for a company to actually make more than it spends has been an academic curiosity, hardly relevant to the success of a company.

Re: The layoffs at Klarna

#27

Post by ec109685 »

I’m not sure who the audience of all 5000 words of that article.

Obviously it caused me to click the link, but it seems like a lot of excruciating detail about internal company process.

I guess its useful for potential future Klarna recruits.

And there’s an even longer extended version behind a paywall! https://newsletter.pragmaticengineer.com/p/layoffs-at-klarna

Re: The layoffs at Klarna

#28

Post by dom96 »

Adjacent to the topic of this article but I really love Gergely's reporting. It's great that he is shining a light at how poorly these companies are handling layoffs. Hopeful that this will change our industry for the better.

Re: The layoffs at Klarna

#29

Post by mrweasel »

> Klarna made a major mistake in not letting the majority of employees know if they were safe from layoffs or not, for a whole night.

I worked for a company that didn't let people know if they where safe, for a week. A friend worked for a company that didn't let people know for 3 months. It's beyond stupid, people becomes nervous and starts looking elsewhere and it's always the best people who leave first.

That being said: Why does Klarna have 7500 people employed? I feel bad for the people who will be losing/have lost their job, but they also won't be the last in tech. Klarna have done what Google, Twitter and other have done, hired people they didn't need, so now productivity per employee is too low.

15 years ago I worked for a company that used Klara for payment, right when they started to expand beyond Sweden. The experience was interesting to say the least. They where completely naive about fraud. They didn't understand the markets they where trying to expand to. If everything else failed, payback the customers and let the retailers deal with any loses.

While I'm sure they improved, based last my experience with them in 2016, I don't see how they could be ready to enter the US market.

Re: The layoffs at Klarna

#30

Post by ivraatiems »

brycewray wrote: post #2

Re item “The pay cut of 2020 which became permanent”: the Day Job I had in 2008 used that year’s onset of the Great Recession to stop annual raises and *never* brought them back — at least, not while I was still there, which was until early 2015.

Wow, what kept you there so long?
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