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Klarna's Bold Move: Stopping Hiring Amid AI Growth

In this podcast episode, Jamie and Jaeden discuss the implications of AI on employment, focusing on Klarna's recent decision to halt hiring due to AI advancements. They explore how AI is replacing certain job functions, particularly in customer support and entry-level positions, while also enhancing productivity for those who adapt to using AI tools. The conversation highlights the balance between job displacement and efficiency gains, as well as the future landscape of work in an increasingly automated world. Chapters 00:00 Introduction to AI's Impact on Employment

01:40 Klarna's AI Strategy and Workforce Changes

06:03 Personal Efficiency and AI Tools

10:27 The Future of Jobs in the Age of AI


Duration:
12m
Broadcast on:
01 Jan 2025
Audio Format:
other
Today on the podcast we're talking about how Kalarna's CEO just recently announced that they have stopped hiring thanks to AI. This is a crazy story, so sit back and enjoy, but before we get into that, Jane, tell them about our amazing deal on our school community this week. Okay, last week, as you all know, our school community is $100 a month and a lot of people asked us if we're going to do a holiday discount and because Jamie and I both love Christmas so much and we love you guys so much. We decided for Christmas we're dropping the price to $19 a month. So if you're interested in joining the AI Hustle School community, which if you're new here is essentially the community where Jamie and I share all of the exclusive juicy details about our businesses, our side hustles and the AI tools we're using to grow them. It's stuff we can't share publicly so it's like a lot of the private stuff, the exact numbers of how much revenue we make from different side hustles, the exact tools and workflows we're using for different things. All of this, all of the information on our side hustles and how we're growing and scaling our businesses with AI tools is in the community. So for only $19 a month, if you get it at $19 a month now with this Christmas discount, you'll be locked in at that price and it will never raise on you in the future. We're going to be raising the price again last week, it was $100 and the future will raise it again, but if you get it now for this Christmas discount, you can get it and be locked in forever at that price. So if you're interested, check out the link in the description of the podcast for the AI hustle school community. We would love to have you as a member with the other more than 250 incredible members we have over there. All right, let's get into what Klarna is doing because I think this is such a fascinating story that really in my opinion is kind of indicative of where AI goes for a lot of software companies. So their CEO famously a while back started talking about how they were replacing customer support people with a new AI with a new AI chatbot, essentially. And how their customers that were talking to the chatbot were giving higher satisfaction scores talking to the AI agents and they were talking to actual agents. So this is like a really interesting story. And overall through that whole process, they essentially got chat GPT to do the work of about 700 human employees. This was at the start of 2024 and this was obviously really controversial. A lot of people talked about is AI going to replace a lot of jobs. So yeah, overall, I think this is really interesting. But yeah, Jamie, what are your thoughts on this whole thing of kind of AI replacing literal people? It's crazy, but I think this is the year that it's really going to start to happen more and more. I mean, just last week in our school community, we talked about how easy it is to drop a AI chatbot onto your website with 11 labs now that will not only, you can train it with your own information, but then also collect information from people. And it's just like a phone call with a chat support person, but it's all AI. So I mean, it's here and it's going to be happening. There's a lot of negative effects potentially to as far as jobs, but I think it's going to, you know, people are going to have to just innovate and try to think of, yeah, I don't know. I don't know. What do you think? What do you think about it? Yeah, I mean, I think I think it's interesting. A lot of people are worried. I don't know if you have to be so worried because it doesn't seem like, you know, they're going and just like firing everyone and replacing with AI. This is what he said about it specifically, but I do think this is important because I think we're going to see the same trend in a lot of companies, but their CEO, C.A.M. Nantoski, he said, we stopped hiring about a year ago. We were 4,500. Now we're 3,500. So he's talking to Bloomberg TV. He said, we have a natural attrition as does most every tech company. People stay about five years. So 20% leave every year and by not hiring, we're simply shrinking. He said that he believes that AI can essentially just replace workers. And he said, quote, I am of the opinion that AI can already do all of the jobs that we as humans do. That is a very bold statement. I think some people agree, some people disagree. He said, we're going to give some of the improvements from the efficiency that AI provides by increasing the pace at which the salaries of our employees increase. So to me, that's kind of interesting. It's not just a cost savings thing. He's, you know, they're losing 20% of their workforce every year. So they went from 4,500 to 3,500 and they're just paying the people that stay more money. So I think that that's really, really interesting. Now you'll notice that like if you go to TechCrunch or other people, they're like, I feel like, I mean, I don't know, I feel like it's like this gotcha jab, they're like, despite his bullishness on AI, the company is not relying entirely on AI to replace human workers who leave as open job listings for more humans and the company's own statement confirm. Okay. One thing I will say because, you know, people are like, oh, but look, they have like, you know, it says they're still hiring work employees. In my opinion, companies always just leave job positions open. This is why like unemployment or I guess like, yeah, job numbers can be tricky for like a lot of different reasons companies just leave like job listings open. And if they happen to see an absolute rock star slip in the cracks, their HR department will often tap that person. But like, you might say like, hey, we're hiring 20 people to do X, Y and Z thing. And then like every six months, they might hire one person for that and maybe close out the position there. I don't know. People leave these open job listings to look like they're still growing and hiring, but when they're not actually growing and hiring. So that's all I'm saying about that. But you can like, if you really doubt them on that, like tech crunch sort of seems like they do, you can just look at the fact that they went from 4,500 to 3,500 in a year and they're not firing people. It's just people naturally leaving and they're not rehiring them at the same rate. Everything is getting done by AI that's essentially getting replaced. So I think that that's really, really powerful and probably a trend we'll keep seeing in the future. But I mean, even at a smaller scale, like Jamie, just for yourself personally, how much more efficient do you think you are just as one person using AI tools versus, you know, three or four years ago, before you had any. That's a great question. I would say, you know, a lot of my, I'm a lot more efficient. I would say if I had to give a percentage-wise, I would spend maybe 30 less, 30% less time in front of my computer than I did, you know, a year and a half ago, just because of AI. So what would you say? I mean, yeah, what's your number? Oh, man. I mean, I think one thing is that I actually take on more projects because of AI and that's like, that could be like more projects in my business, in my software company scaling, in, you know, more podcasts, like for example, I run like three podcasts, like three major podcasts right now, AI chat, AI hustle and AI applied. If I didn't have chat GPT to help summarize articles or to come up with like the descriptions of podcasts or come up with like the show notes, like, or to help like with, you know, when I'm doing interviews, come up with interview questions or even just to spur ideas on stuff, there's no way I could be doing three podcasts. So I think like my big output that I really focus on is like growing my podcast and creating the highest quality possible thing. I mean, at least three X, there's no way I could do three. I'd definitely not be, I'd barely be able to do one without chat GPT. So that's three X and then I have tons of other projects that I do. I think thanks to a lot of the things that AI has unlocked and it's not like AI does everything for me, but it augments me in such a big way. So I think that's something interesting about this that, I don't know, some people think it's kind of controversial, but like the CEO of Klarna, he made an AI deep fake of himself and he was an essentially reported their financial results for the year. And his goal with that was to prove that even the CEO could be replaced by AI. I mean, as a video, sure, it could be replaced, but like are his top down decisions and strategies replaced by AI sort of doubted, you know, yeah, well, that's interesting. There are two different perspectives on it though, yours, you know, AI is allowing you to be more productive. So you're taking on more projects where me, I'm spending less time in front of the computer, mostly because of my real estate projects and things that I've gone on right now. So I'm trying to save, save time from being in front of the computer where you're actually spending the same amount, but you're getting more done. Yeah, and I think, you know, kind of what, back to the whole 20% churn of employees thing, I feel like that's because a lot of those people are, you know, entry, they're in an entry level position and they want to kind of jump up the ladder. So, you know, those are, I feel like the kind of positions right now that are being, you know, eliminated by AI is those entry level ones. So I don't know if I agree with them about the higher level ones, but I mean, maybe, maybe someday, who knows? Yeah. It's interesting. I was talking with someone today that's a developer and they were saying one of the industries they feel like that got completely nuked was like, for developers, there's like this thing where you don't really have to go get any credentials, you just do a code camp and you're kind of an entry level developer and you can do some like basic stuff and you get your foot in the door at a company and you kind of grow from there. And he was saying, like that whole industry has been completely nuked by AI and chat GPT because you don't need any of these real entry level developers anymore, chat GPT does all of that. Some of the menial tasks, like he'll take like a massive, you know, I don't know, a massive project of code, dump it into chat GPT and say, hey, like reformat it in XYZ format the way we need. Usually you get a like a lower level or an entry level developer to help with a big project like that. And he's like, yeah, chat GPT or anthropics cloud will spit that thing out in like a minute. And I have the whole thing done. I go check it and make sure there's no bugs, but it's usually pretty good to go. And so it's like, it's not like it. It also does write code. And so, but like for these types of projects he was talking about, it's not like it wrote code. It was just doing some of the menial stuff, but you got to know how code works and you got to go through it. And it's pretty tedious. And it saves hundreds of hours on that kind of stuff. So it really is, um, I think, yeah, like you mentioned, a lot of the lower level stuff. But then I think higher level people can use it to augment themselves and get a lot more done. So the top level people getting a lot more done, the low level people eliminated. Overall, the company is, I think, just producing and doing more with AI now. Yeah, that's crazy. I would love to know, you know, stats, you know, from some other companies too. That seems pretty aggressive, to be honest, to be able to replace a thousand employees. I don't know, it's probably is more in the tech industry, at least right now, more so than any other because of the entry level coding, like you said. I mean, I think tech support oversees, you know, the outsourced, you know, people that talk to you on the phone about canceling your, your cable subscription. I think those will be maybe the next to go. But we'll see. Yeah. Uh, I hope so. I hope there's also an AI that can, well, actually there is an AI that can, that can screen and block those. I need to get it, man. I get so much spam, so many spam calls, but, uh, yeah, there's some exciting stuff out there. You can spam you an AI to fight the spam, but at the end of the day, uh, hopefully there's more pros than cons with all of this. Anyways, if you learned anything new in this podcast, the number one thing we'd really appreciate is a review on the show. Uh, you know, we'll make these shows for free for you because we love you. And, uh, if you love the podcast, we love a review. Um, on Spotify, you hit the about tab, you can drop down and drop a review. And on Apple, leave us some comments. We read them all. We love them. We really appreciate them. Hope you all have an amazing rest of your day. And if you haven't already, we would love to see you in the AI hustle school community for our Christmas special, $19 a month, and we can, uh, we're excited to grow your business to the next level with you, hear from you on how you're doing it, and, uh, I'll share some good stories. Thanks so much for tuning into the podcast. We'll catch you next time.

In this podcast episode, Jamie and Jaeden discuss the implications of AI on employment, focusing on Klarna's recent decision to halt hiring due to AI advancements. They explore how AI is replacing certain job functions, particularly in customer support and entry-level positions, while also enhancing productivity for those who adapt to using AI tools. The conversation highlights the balance between job displacement and efficiency gains, as well as the future landscape of work in an increasingly automated world. Chapters 00:00 Introduction to AI's Impact on Employment

01:40 Klarna's AI Strategy and Workforce Changes

06:03 Personal Efficiency and AI Tools

10:27 The Future of Jobs in the Age of AI