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The layoffs at Klarna

blog.pragmaticengineer.com

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Re: The layoffs at Klarna

#61

Post by treis »

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…

In a lot of ways internet businesses are like buying bonds. You pay some cost to acquire a customer and will get revenue from them over time. You can calculate a present value for that customer based on that future revenue. As long as that value is more than what you paid to acquire the customer you're making money.

And if your numbers are right then you, more or less, want to spend as much money as you can buying customers. So that's how companies with numbers like this continue to operate.

To put it simply, Klarna is spending a billion dollars to buy customers that will generate more than a billion dollars in revenue. The catch is that you have to pay now for later revenue. So your numbers look like crap until your existing customers far outnumber your new ones.

Re: The layoffs at Klarna

#62

Post by orzig »

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…

That is awesome for a cohesive, high functioning team. I worked at a company with some obvious (to everyone else) under performers, and as much as I wish they had not been a layoff, I would have been pissed if some of the nicer members of the team had volunteered to take the bullet.

That said, the standard layoff protocol only got rid of one of them, and the other only left after reacting badly to the slight uptick in performance feedback (suggesting his lack of self awareness)

Re: The layoffs at Klarna

#63

Post by testing7787 »

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…

No post body was provided.

Re: The layoffs at Klarna

#65

Post by hulitu »

mhuffman wrote: post #49
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…

>We all believed that we were awesome and would continue growing and winning. Hilarious since Klarna has one of the worst customer service experiences I have ever witnessed. Their real monetization strategy seems to be to get your mobile information. It is not necessary to micro-finance through them, just to do anything at all after that! They actually have a website, which you might think would be an alternative way…

If it works for Google, shall work also for them.

Re: The layoffs at Klarna

#66

Post by ygram »

I have never understood why health ensurance is handled by the employer in the US, why don't people buy private health insurance instead? It feels insane to put yourself in that kind of dependency on your employer.

Re: The layoffs at Klarna

#67

Post by lumost »

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…

For transaction processing, wouldn't a 1-3% margin be about the maximum achievable? That would translate to about 15 million dollars in potential profit against a 730 million loss.

Re: The layoffs at Klarna

#68

Post by nibbleshifter »

BonoboIO wrote: post #38
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…

Hit them hard with a GDPR request, forward it to your local privacy organization. In Europe this is popcorn time.

This is what I do with every single company I have even the slightest negative interaction with regarding my data.

Its a lot of fun.

Re: The layoffs at Klarna

#69

Post by mlonkibjuyhv »

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…

Oh all the things I wish they would use their marketing budget on. For instance they still can't correctly compute different VAT classes in their merchant reports.

Re: The layoffs at Klarna

#70

Post by jedberg »

curiousllama wrote: post #60
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…

Oh yeah for sure. The only reason she could do it is because we all got along.

I would not recommend this approach for most managers. :)

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