Buy now, pay later (BNPL) provider Klarna’s CEO Sebastian Siemiatkowski has taken to LinkedIn to provide a list of laid off Klarna employees other companies should consider hiring.
The move comes amid a growing job crunch in the tech industry echoing in Australia as recently as yesterday when Envato announced a number of restructure-related redundancies. Around one in seven Envato employees faced redundancies and retrenchments this week, affecting a 100 roles globally.
Klarna posted an official announcement on May 23, stating the organisation had made a “tough decision” to re-evaluate its organisational setup, resulting in 10% of Klarna employees losing their jobs. The evaluation was made on two principles, including the “right teams to focus on the right things” and “the right people in the right place”.
The announcement didn’t provide a concrete reason for the redundancies, but rather pointed to various nebulous macro issues such as “a tragic and unnecessary war in Ukraine”, “a shift in consumer sentiment, a steep increase in inflation, a highly volatile stock market and a likely recession”.
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Klarna also hopes to raise up to $1 billion at a lower valuation of $30 billion. This, as the Wall Street Journal notes, is a 30% drop from the previous round last year, where they had a valuation of $46 billion.
Siemiatkowski’s unconventional post on LinkedIn promotes an initiative by a Klarna employee to compile a document in which those affected sign up to show recruiters their availability. It features 560 staff, including six Australian employees and one from New Zealand.
In the post, Siemiatkowski says he had “mixed feelings” about the document, for while it “symbolises much of what I am proud of among Klarna’s employees, it is also a tangible symbol of a very hard decision that saddens me deeply and will stay with me for a long period of time”.
While the move has been applauded by some who echo Siemiatkowski’s sentiment that the list is a “goldmine”, Klarna has come under fire, with its UK employees questioning Siemiatkowski’s decision to publicise the list, with The Guardian reporting staff were “blindsided” by the announcement.
There were also privacy concerns raised, given that private details of the employees were now circulating in the public domain. The creator of the document, J. Tyler Wilson, of Klarna Marketing, has since removed the email column, admitting that while he expected some reach, it was beyond what he anticipated. The list now includes links to the employees LinkedIn, location and work mode preferences.
There has also been criticism of how poorly the redundancies were managed, while Forbes reported that Siemiatkowski “angered employees by attacking their labor unions and defending a 48-hour delay in telling some staff whether their jobs were safe”.
Siemiatkowski has since hit back at the criticism, calling it “unfair and uneducated”.
“Considering the complexity … it disappoints and I must say I would have expected a better climate where 48 hours is an acceptable time limit to have that conversation internally.”
Klarna isn’t the only big company to cut jobs, with recent layoffs at Netflix and Paypal, among others. The US tech sector is currently seeing the highest job cuts since December 2020, with nearly nine times more job lost in May than the first four months of the year.