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The layoffs at Klarna

blog.pragmaticengineer.com

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Re: The layoffs at Klarna

#51

Post by djbusby »

speedgoose wrote: post #9
akmarinov wrote: post #6

Earlier quoted context omitted.

> Klarna’s “Super App” was an area getting lots of investment in 2021. This investment was a step away from the core offering of the handling of payments. The vision of this app was to create an experience where people could do all their shopping within a Klarna super-app. However, this super app never launched as planned. Internally, confusion arose when it emerged the super app would use scraped data from customers…

But can you keep thousands of people busy on such a project?

A technique I learned from possibly the worst project/product manager ever was to have loads of meetings. And over schedule them. And show up late. It makes everything so slow, and you have to have more people so that somehow, in between meetings a line of code could be written.

Re: The layoffs at Klarna

#52

Post by CharlesW »

chrsig wrote: post #14

> The culture of “we are awesome” has dominated most internal communications for the last couple of years, including in 2022. We all believed that we were awesome and would continue growing and winning. This is the big thing that drives me nuts . I don't know if it's a fragility of ego thing or what the cause may be, but it results in a corporate inability to critically self-evaluate at the highest levels. If you can…

I worked for a company where the C-suite used the phrase "drinking our own champagne" instead of "eating our own dog food". To me, this just oozed insecurity about the product and the company.

Re: The layoffs at Klarna

#53

Post by polote »

chrsig wrote: post #14

> The culture of “we are awesome” has dominated most internal communications for the last couple of years, including in 2022. We all believed that we were awesome and would continue growing and winning. This is the big thing that drives me nuts . I don't know if it's a fragility of ego thing or what the cause may be, but it results in a corporate inability to critically self-evaluate at the highest levels. If you can…

Nothing matters as long as a company is growing. You don't have to improve or have the best tech or the best sales or do everything right or have the best culture. The only thing that matter for a company is to grow.

Re: The layoffs at Klarna

#54

Post by runnerup »

mrweasel wrote: post #39
Traubenfuchs wrote: post #10

Earlier quoted context omitted.

That's insane -what's the magic event people believe will turn those losses around?

It's kinda fascinating really. We had a client that had only ever lost money. Their idea was pretty good, they had what I'd call a working prototype and paying customers. Our CEO happened to know one of the investors, and chatted with him about the investment and the numbers we did on a whiteboard. Even if they grew their business with 10 times the number of customers, and each customer ramped up their usage 10 times…

Even if the already-invested money can’t be recouped, marginal additional investment could theoretically be with favorable (LIFO) terms offered typically offered to later investment.

So sure, acknowledge a bad $300 million bet, but then throw your next $50 million at the same bet if it looks like the best place to put a marginal $50 million.

I don’t always think investors are doing this rationally - sunk cost fallacy / gamblers paradox / greater fool theory / FOMO all play a part, but also recognize that lots of these super large investments are led by a small team using lots of other peoples money so there are ways for the decision-makers to come out closer to breakeven if much of the pot is lost.

Also with potential IPO’s and sky high rate of valuation growth over the past decade, the “greater fool theory” isn’t necessarily an irrational motivation to invest.

Not all smart investments are value-based.

Re: The layoffs at Klarna

#55

Post by toomuchtodo »

PheonixPharts wrote: post #26
logifail wrote: post #7

Earlier quoted context omitted.

> 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 the…

The stock and exuberance are the product.

Re: The layoffs at Klarna

#56

Post by msie »

rubyist5eva wrote: post #42
chrsig wrote: post #14

> The culture of “we are awesome” has dominated most internal communications for the last couple of years, including in 2022. We all believed that we were awesome and would continue growing and winning. This is the big thing that drives me nuts . I don't know if it's a fragility of ego thing or what the cause may be, but it results in a corporate inability to critically self-evaluate at the highest levels. If you can…

> The self congratulatory back-patting (even if it's just "everything is fine, we're doing great") is treating success like an achievement. Success requires vigilance. Excellence is not an achievement, it's an activity. I used to wonder why friends of mine would get gifts for things like graduating elementary school or even high school. I asked my father for something because I was graduating highschool on the honour…

> If you aren't succeeding, you are failing - and I was expected and taught to succeed by default.

That sounds messed up too. Maybe you need a break now and then from trying to succeed all the time.

Re: The layoffs at Klarna

#57

Post by allenu »

hotpotamus wrote: post #19
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…

I recently left an 8,000 person company that's been on a 2 decade loop of private money to publicly traded and back a couple times now. It occurred to me that in 25ish years (about 10 of which I worked there) that it might never have made any money - I can't remember a profitable year ever; we were always seeking growth above all else. I now work at a small SaaS company of around 50 people and it's only ever made mon…

> I recently left an 8,000 person company that's been on a 2 decade loop of private money to publicly traded and back a couple times now. It occurred to me that in 25ish years (about 10 of which I worked there) that it might never have made any money

That is crazy if true. My fear is that there are a ton of tech companies like that, just chasing future profits or an acquisition, but not actually creating anything of value (at least in terms of profit).

I don't know. It just doesn't sit well with me knowing that a lot of products we build don't actually make any money. We're all just part of some weird system of money re-allocation and the software is just there as a signal that money should change hands.

Re: The layoffs at Klarna

#58

Post by throwaway36756 »

I worked at Klarna between 2011-2013 as a software engineer and later as a team manager. I was laid off in a very similar fashion at the same time a bunch of others also got the same surprising news.

When it happened to us there was no announcement from the CEO. Sebastian had actually just gone on parental leave and one of the co-founders, Niklas Adalberth had taken the reigns.

At the time, my suspicion was that it was because Niklas Adalberth was getting rid of people he didn’t like and that the main reason my firing in the way it was done.

I was invited to an external meeting room at 17:00 in the Stockholm office with my boss and my boss’s boss, where they proceeded to tell me “we think we need someone else in your position”.

My boss looked helpless and sat quietly the whole time. My boss’s boss did all the talking and seemed just like someone following orders.

Reading this now it’s sad to see how nothing has changed at Klarna and makes me think that even if Niklas did had something to do with my firing that it couldn’t have happened without Sebastian’s knowledge and approval.

My experience of Sebastian was that he was a talented product guy, but unfortunately seems to leave a lot to be desired as CEO.

Re: The layoffs at Klarna

#59

Post by icegreentea2 »

rubyist5eva wrote: post #42
chrsig wrote: post #14

> The culture of “we are awesome” has dominated most internal communications for the last couple of years, including in 2022. We all believed that we were awesome and would continue growing and winning. This is the big thing that drives me nuts . I don't know if it's a fragility of ego thing or what the cause may be, but it results in a corporate inability to critically self-evaluate at the highest levels. If you can…

> The self congratulatory back-patting (even if it's just "everything is fine, we're doing great") is treating success like an achievement. Success requires vigilance. Excellence is not an achievement, it's an activity. I used to wonder why friends of mine would get gifts for things like graduating elementary school or even high school. I asked my father for something because I was graduating highschool on the honour…

> If you aren't succeeding, you are failing - and I was expected and taught to succeed by default.

Nitpicking, but you were expected to succeed by default, and also taught to strive for success by default (and presumably also taught the tools and approach to maximize likelihood of success). People cannot be taught to "succeed by default", anymore than someone could be taught to "win the world series by default".

And then that unpacks the challenge of this particular world view (and points at why the 'self-esteem thing' is a thing), is that learning to strive for success, and learning the tools and methods to achieve success does not mean you will actually reach success (this would just be a variant of the just-world fallacy). The challenge is how do you create the motivating factors and structure for as many people as possible (hopefully everyone) in your society/culture to earnestly strive for success, but not crack apart when they encounter continued failures.

Re: The layoffs at Klarna

#60

Post by curiousllama »

jedberg wrote: post #34

Wow, that sounds so poorly handled. Not figuring out a way to tell everyone affected at (nearly) the same time is probably the worst sin. Best layoff I ever went through was when my boss came to our team and said, "look, don't tell anyone, but we have a layoff coming in a few days. I have to let one of the three of you go. Do you want me to decide or do you want to decide amongst yourselves?". She knew we were good f…

> Best layoff I ever went through was when my boss came to our team and said, "look, don't tell anyone, but we have a layoff coming in a few days. I have to let one of the three of you go. Do you want me to decide or do you want to decide amongst yourselves?"

Judging from your reaction, it sounds like yall had a great work environment, and that this was a good way to handle the layoff for your team. It sounds like it went smoothly, which is 100%, A+, great.

But HOOO BOY, that was a HIGH RISK move by your boss. I sincerely can't imagine the clusterf** that would've resulted from that at some of the places I've worked. Good GOD. This is an invitation for a lawsuit on a silver platter, holy guacamole.

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