Klarna replaced 700 people with AI. A year later they were hiring them back.
February 2024. Klarna's press release went everywhere. Their AI assistant had handled 2.3 million customer conversations in its first month, the work of 700 full-time agents. Resolution time fell from 11 minutes to under two. Projected savings, $40 million a year.
Fifteen months later, CEO Sebastian Siemiatkowski told Bloomberg:
"We went too far."
They had optimized for cost and watched quality fall. Klarna now runs a hybrid model, rehiring people to take anything complex or emotional while AI absorbs routine volume.
The popular reading is that the AI wasn't good enough. The AI worked. 2.3 million conversations, eleven minutes down to two. The model did what it was built to do. What broke was everything around it.
Humans Must Still Do Follow-Up and Monitoring Outcomes
Making sure the invoice matches the contract. Making sure a decision made Tuesday reached the people who needed it by Thursday. Nobody has that job. Everybody does that job.
A chat window will not do one minute of it. It answers when asked, and it will never notice that two numbers disagree, because noticing requires somebody to go look.
1,200 times a day though?
Harvard Business Review, 2022. Researchers analyzed 122,000 application-switching events across 137 employees at three Fortune 500 companies. The average digital worker toggles between apps about 1,200 times a day. Five working weeks a year, gone to reorienting.
We invented the most capable reasoning tool in a generation and shipped it as another window to open. The 1,201st toggle. We looked at a company drowning in context-switching and handed it one more context to switch into.
Models are extraordinary and improving on a schedule. The constraint is placement. Every tool that asks you to go somewhere loses to the tool already open. This is why the doors to a casino are hard to find. They want you to stay inside.
AI is Supposed to Remove Meanial Tasks
I've been trying to build an agent that handles 2 things well.
Email Triage and Calendar Mgmt.
This agent lives in the one thing on your phone that is already open and already answered within minutes. Messages. No new tab, no fourteenth window. It's called TextAgent.io
A lead emails at 9 PM. You get a text. You reply "offer them Thursday." It writes the email and puts the meeting on your calendar.
The model isn't better than anyone else's. It meets you where you already were, and that is the whole advantage.
Klarna and the industry made the same mistake. They bought capability and skipped the glue, and the glue lives between systems where nobody is looking.
Text 737-377-1927 and try it. It answers.
— Keith
I'm the CTO of Q1Media, where I've built the Digital Media Operating System since 2012. More than $300 million in media spend has flowed through that system. I publish The AI Playbook for enterprise technology leaders and practitioners.