Tech

Klarna’s CEO is protecting the business despite big losses and layoffs

Klarna CEO Sebastian Siemiatkowski defended his company’s business model and the controversial “buy now, pay later” industry.

Klarna gives customers the opportunity to pay for the goods – they can pay in advance, in installments or defer payment for a certain period of time. Critics say it allows people to buy things they can’t necessarily afford, although Klarna says it conducts availability checks to ensure consumers can pay for them.

In an interview with CNBC’s Squawk Box Europe on Friday, the Swedish businessman said the BNPL was “preferable” to the credit card model, arguing that the average Klarna user has $ 50 in debt, while the average credit card user has in debt. the rest is $ 5,000.

Semyatkovsky went on to say that his business is “extremely resilient to the recession” compared to traditional credit card companies. Last year, however, financial technology reported losses of $ 748 million, and last month announced it was laying off about 10% of 6,500 employees as part of a cost-cutting effort.

In addition, Klarna will soon be competing with Apple in the BNPL sector after the iPhone maker announced this week that it plans to hit the market with a new product called Apple Pay Later.

This puts BNPL players, such as PayPal, Affirm and Klarna, in an awkward position. Fears that Apple, a $ 2 trillion company and the world’s second-largest smartphone maker, could distract customers from such services. Affirm shares fell 17% in the news this week.

“I think this is the final, mass acceptance of what is a much healthier form of credit for me,” Semyatkovsky said of Apple’s entry into the market.

Klarna’s CEO is protecting the business despite big losses and layoffs

Source link Klarna’s CEO is protecting the business despite big losses and layoffs

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