CEO Sebastian Siemiatkowski said in a statement to the Financial Times that the company could operate effectively with half of its current workforce. The Swedish buy-now, pay-later company has already reduced its workforce from 5,000 to 3,800 in the past year, the FT reported on Tuesday.

In the coming years, the workforce is to be further reduced to around 2,000 employees. Siemiatkowski said that with the help of AI, the company can “achieve much more with less.”

In May, Siemiatkowski wrote in a post on X that the company had saved millions by “spending less on photographers, image databases and marketing agencies.”

He added that the marketing team had been more productive, operating at half the size of the previous year.

Last year, Klarna stopped hiring for most positions outside of its engineering team as the company increasingly relied on AI technology to fill gaps left by departing employees.

In a February blog post, the company claimed its AI assistant could handle the workload of 700 full-time employees. Klarna said the chatbot was more accurate than human employees at “getting tasks done” and also kept up with human employees in customer satisfaction.

Klarna also predicted that this technology could increase the company’s profits by $40 million this year.

Meanwhile, Klarna competitor Affirm is also relying on AI chatbots, but is not planning any public staff cuts.

“So far, no one at Affirm has lost their job and been replaced by a robot, so this is not a short-term cost savings,” CEO Max Levchin said on a conference call in May, adding that AI could save the company money over the next one to three years.

Other technology companies are laying off employees as they transition to AI-centric business models.

Earlier this month, Dell announced a major restructuring of its sales department, resulting in mass layoffs.

According to data from online tracker Layoffs.fyi, technology companies including Google and Apple have laid off over 350,000 employees since the beginning of 2023. While many of these layoffs are due to overstaffing during the pandemic, the need to reallocate capital to AI investments is also a major factor in the layoffs.

Meta CEO Mark Zuckerberg said in a conference call in February that layoffs were necessary to invest in “long-term, ambitious visions around AI.”

Google CEO Sundar Pichai also wrote in a January memo that job cuts were necessary to create “capacity for investment” in AI.

Klarna had attributed an improvement in its financial performance to artificial intelligence. The net loss fell from 854 million Swedish kronor, about $84 million, in the second quarter of 2023 to 10 million kronor, about $900,000, in the last quarter.

The company also reported a 27% increase in revenue and a 73% increase in revenue per employee within 12 months.

Klarna is preparing for an IPO as early as next year, although Siemiatkowski told the FT that the company has not yet made any decisions regarding the IPO.

Klarna did not respond to a request for comment from BI sent outside normal business hours.