Klarna, Europe's "AI poster child," is scaling back its aggressive chatbot strategy after initially replacing 1,000 employees with AI systems. While CEO Sebastian Siemiatkowski previously claimed AI could perform all jobs including his own, the company now acknowledges sacrificing customer experience quality. Their ChatGPT-powered system handled work equivalent to 700 human agents, with 96% of employees using AI daily. However, customer frustration with chatbots and declining satisfaction led to a strategy shift, with Klarna now rehiring staff to restore human interaction. This aligns with broader industry findings showing only 25% of AI projects meet expectations. Klarna's experience demonstrates that while AI offers efficiency, it cannot fully replace human empathy in customer service.
