Would you replace 700 employees with AI?

There's been a lot of hand-wringing about AI making a wide range of human jobs obsolete – but the first year of "modern AI" (which I'm defining as the era since the release of ChatGPT in November 2022) didn't produce many examples of job loss actually happening.

Now, that's starting to change, and the first big case study in direct replacement of humans by AI comes from Klarna, a Sweden-based e-commerce company that offers "buy now, pay later" options at online checkout.

In short, Klarna offers shoppers something similar to a store credit card – rather than paying $500 now, you might split it into 12 payments with a micro-loan from Klarna that gets issued within minutes. The e-commerce provider then pays Klarna a fee (usually around 6 percent, higher than what they'd pay for a Visa or Mastercard transaction, but still a good deal if it makes it easier for the customer to buy the product).

As you might imagine, Klarna has lots of customers and those customers have a lot of questions. This means they hire lots of customer service representatives.

And those customer service reps are the first major, public casualty in the conflict between AI and human jobs.

The big numbers

Klarna made the dubious decision to publish a splashy announcement about their AI breakthrough – something that sets them apart from many other companies, who've been intentionally quiet about what they know is a hot-button and sensitive issue. For reasons that will become more clear in a moment, the Klarna team went the opposite route, touting their new AI customer service chatbot as an incredible accomplishment. (They're not wrong... but it's complicated.)