By all metrics, Swedish fintech startup Klarna, still one of top names in the buy now, pay later (BNPL) world, has had a string of remarkably bad luck. Following a massive downturn in the fintech market, the company’s difficulty meeting its aggressive expansion and profitability projections caused an 85% drop in its market value, culminating in layoffs affecting approximately one tenth of its workforce in May.
According to Chief Executive Officer Sebastian Siemiatkowski, however, those layoffs came at exactly the right time for Klarna to ensure its continued success — in fact, the timing was perfect not only for Klarna, but for its employees.
“To some degree, all of us were lucky that we took that decision in May because, as we’ve been tracking the people who left Klarna behind, basically almost everyone got a job,” said Siemiatkowski in a recent interview. “If we would have done that today, that probably unfortunately would not have been the case.”
While this comment has drawn some fire from employees and other fintech executives alike, the facts have borne out Siemiatkowski’s sunny perspective on Klarna’s response to the looming recession. Many industry voices have fingered out-of-control spending and hiring as factors that would have inevitably led to a fintech crash, and Klarna’s quick response in tightening its belt have increased its odds of reaching profitability in the near future.