Observed Signal · May 23, 2022 · Layoffs · Source: Trending Topics · Impact: 2/5 · Sentiment: Negative
Klarna to Lay Off 700 Amid Downround Funding Talks
Swedish buy-now-pay-later fintech Klarna announced it is cutting about 700 jobs, roughly 10% of its workforce. CEO and co-founder Sebastian Siemiatkowski said in a staff memo that the decision was driven by a likely recession, surging inflation, volatile stock markets, the war in Ukraine, and shifting consumer sentiment. The restructuring follows a Wall Street Journal report that Klarna is seeking around $1 billion in new financing at a valuation of approximately $30 billion, about 30% below its previous $45.6 billion valuation. Klarna posted a €668 million net loss in 2021 despite strong revenue growth. Plans for an IPO have reportedly been shelved. The company continues to serve 400,000 merchants and 150 million consumers. Other European startups, including Kry, Pollen, and Hopin, have also announced layoffs.
Major European BNPL fintech announces a 10% workforce cut and faces a downround, signaling broader tech downturn effects relevant to the e-commerce and digital payments ecosystem.
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Key Takeaways & Evidence Grounding
- Klarna is laying off approximately 700 employees, or about 10% of its 7,000-person workforce.
- CEO Sebastian Siemiatkowski announced the layoffs in a memo to staff, citing likely recession, inflation, and market volatility.
- Klarna is reportedly seeking $1 billion in new funding at a valuation of about $30 billion, roughly 30% below its previous $45.6 billion valuation.
- Klarna's 2021 net loss totaled €668 million.
- The Wall Street Journal first reported the lower valuation in connection with Klarna's current fundraising.
Connected Companies & Entities
3 Entities mapped“Fintech Klarna announced mass layoffs of around 700 employees ahead of a reported downround....”
“The Wall Street Journal first reported Klarna's strongly reduced valuation during its current fundraising....”
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