Honestly, what a terrible letter. Did not once say the words layoff or let go. Using phrases like “continue to be part of klarna’s journey”. Good lord, is this a business or a cult? And not a single line about concrete steps they will take to support the layoffs (multi-month severance packages, etc). Hopefully that is what they intend, but as of right now, this is pretty disappointing.
From a Swedish perspective this is probably a "varsel" which is prior notice that they intend to do layoffs. You can't just fire people in Sweden so this is a first step. They have to give notice that they intent to layoff people to the different unions and then start the process. In other countries where they operate it's probably very different?
My guess is it will vary a lot how they do this because of first-in-first-out rules in Sweden they will have to get around to be able to layoff the people they want. I agree with the general sentiment though that the language is a bit vague, but this is a partial reason I think.
As one of the candidates to being lay off, not everyone is covered by Swedish law, and in my situation I’ll be completely under the scope of being impacted, which sadness me because the overall experience with the company was the best I ever had.
Fucking hell I’m actually pissed.
Probation and in another region, though I was lucky enough to be in a core team and I was not impacted, it sadnesses me knowing about anyone else not as lucky as me.
From Finnish perspective. "Impacted" might also mean role change. That is you are moved to new role or there is some type of other reorganization potentially, not just laid off or mandatory leave...
What is the first in first out rule? Does it mean that the people that joined the latest will be the first ones to go? And also is this a law or something that usually happens but not necessarily? Asking because I work in Sweden and I was not aware of something like this.
(S)he was wrong. There is no first-in-first-out principle in Sweden, neither by law nor by practice. Instead the last to enter _may_ be the first to leave, but the employer can choose to withhold two persons. Also, this arithmetic is determined per "office" so depending on how you organise the workforce you can, at least in principle and to some degree, select who has to go.
Yes last-in-first out. My guess here is that they need to figure the points out that you mention so it's hard to say "we're letting X amount of people go".
What a weird comment. The letter was perfectly fine. Firing a bunch of people is hard, impacts morale, and it's important to make sure people that you keep onboard don't panic. The letter didn't seem culty to me at all, and supporting layoffs was clearly addressed and will be done on regional-specific terms. Lawyers look at this kind of correspondence and tone down the language in some cases.
I agree, I thought the letter was fine. Classy, even.
I don't see a need to have more specific language in the all-employee announcement email.
The right place for that language is in the message(s) specifically to the person's being fired. And, to their credit, they let people know ahead of time what the exact subject of that message will be.
I agree - I read the parent's comment before reading the letter, expecting to see some corporate babble.
But, honestly, I didn't see that. Sure, there is euphemistic language, but the message is very clear:
1. 10% of the company is getting laid off.
2. The CEO was very explicit about how this process would unfold (e.g. stating what the email title would be), which is a lot better than most companies provide.
We can always endlessly nitpick the language choices when a layoff happens, and I don't think I've ever seen a layoff announcement on HN, even ones I thought were extremely transparent and free from corporate-speak, that didn't get shit on by a sizable number of comments.
Layoffs suck. There are really shitty ways to do them, and less shitty ways to do them, but there are no real great ways to do them.
10% is "getting impacted". I find it ridiculous when people use language like this. Especially a CEO. Have some courage and say the thing out loud. He who must not be named has a name, it's Voldemort.
Fine, I concede that point and agree, but at the end of the day it really doesn't matter. Everyone certainly knows exactly what he's talking about - it's not like he's being ambiguous.
I believe that clear, concise communication should live at the top of every message. Thoughts, feelings, explanations; that stuff goes down below.
"Today, I have to announce unpleasant news: in the coming days, Klarna will be downsizing our workforce. If you are impacted, you will receive a meeting request shortly to discuss specifics for your separation.
Even though I've been a CEO for BLAH and this is HARD and BLAH BLAH and you're forever my KLARNA HOMIES and this WAS NOT my fault, BLAH…"
The letter is sent to employees, get impacted is explicit enough for the targeted audience.
Do not conflate perception gap and intended ambiguity.
No matter how through presented, message can get lost for anyone because of non-overlapping background in understanding. Neither the author nor the readers should feel negatively about that.
I feel it's better to use "fired" or "have to leave your job" or "layoff" or "terminate the employment contract" than "let go".
Because "let go" is to "allow someone or something to escape or go free" so it implies that you are the owner of the employee and you allow him to leave, just like as an ultimate humiliation he has to have your permission to go.
It's an alternative to laid off I think. When I think of let go, I think more contract work or temp workers. They were let go, but they weren't laid off since they weren't permanent employees to begin with.
Can we all agree that "impacted" is worse than both of those? It provides no clear information about what is actually happening, relying on the entire audience to make the "aha, we're being laid off" connection themselves. "Impacted" appeared five times, "Affected" once, but it was left to the recipients' imaginations to figure out what they were actually being impacted by. Finally, they get around to framing it as "not being offered a role in the new organization"--another euphemism. I mean, it's one thing to soften the message a little when bearing bad news, but "impacted" is softened to the point of uselessness. George Carlin had a bit[1] about this.
I actually found it a humane way of dealing with the situation.
They let everyone know in advance. Have the decency of individual communication. Anticipated what type of invite to expect. Promised to roll out quickly, in a matter of days.
I mean, probably not the "perfect" layoff, but certainly not close to worse, or even "terrible".
I very much disagree. For people with anxious tendencies, this type of email is absolutely awful to receive, and consider that most of those let go will be at lower rungs of the company, so job security in the current market is going to be a big source of anxiety.
“You are at risk of losing your job, but you’ll have to wait all week to find out”
As commented above, you have to do it this way in Sweden, you have to announce in public that you are going to lay off people and then from there on you negotiate with the union if you plan to not do stack-based firing (last-in-first-out).
That’s not what they’re doing though, they’ve announced it and plan to tell people over the next few days, certainly not enough time to negotiate with a union. They’ve already chosen who is being let go, they’re simply delaying the process of informing people because (presumably) managers only have a certain capacity for meetings: they think a delayed face-to-face meeting is better than an immediate email.
For Swedish employees it's not as easy as calling someone into an office and lay them off. You can of course tell someone that you want to lay them off but from there to actually doing it you have to negotiate with the union and/or the employee.
Right, and I’m arguing that informing 700 people today that they’re being laid off is more humane by an order of magnitude than telling 7,000 people they might be laid off this week and to stay away from their peers. There’s nothing in Swedish employment law that dictates this approach by Klarna. The letter clearly states why they made this decision, it wasn’t a legal one, it was a misguided attempt devoid of empathy focused exclusively on external optics because of what happened with better.com etc.
> “You are at risk of losing your job, but you’ll have to wait all week to find out”
I think this is actually pretty nice because it gives you a bit of time to start polishing your resume. Even if you don't get laid off, that's always a good idea.
> For people with anxious tendencies ... the current market is going to be a big source of anxiety
I sympathize, but unfortunately I don't see much of what an employer could do to mitigate. This is just the harsh reality that everyone must live through...
Not possible to do it personally for dozens or hundreds of people.
If they did it by email, a lot of people would criticize as well. Perhaps, just perhaps, even yourself in the past has criticized or at least found (in your thoughts) an awful way of communicating a lay off?
I did not discredit your argument. It's indeed awful. I'm just inviting to reflect that any way will be awful.
How awful each option is perceived is subjective. If they did it by email, many people (perhaps you and I included?) would be here criticizing the lack of humanity and basic consideration to impacted employees...
I don't know if 24 hours can be considered "in advance". It is by definition, but usually in advance means I can take some sort of action to be prepared.
Another indicator consumer spending is dropping and costs are going through the roof. This is probably the first of a bunch of layoffs sadly. I expect Finances (Banks / Mortgage providers) are going to be aggressively reducing headcounts in the near future. One side of my family is heavily in that industry and they're all extremely nervous.
Sorry for anyone that lost their role, it's always tough to lose a job regardless of the company they worked for. I wish them all success and luck finding their next endeavor.
This is most likely not related to cash flows. This seems to be a preemptive strategic layoff to cut costs in preparation of tougher times to raise money / higher interest rates.
That’s true, it doesn’t capture data from the last two months.
The trends in market valuations have been consistent for several months now though, going back into last year. Whereas any collapse in consumer spending has yet to manifest itself for any longer than a month and a half.
It has a little bit to do with Ukraine, insofar as energy is having its own shortage exacerbated by the conflict on top of the massive inflation that would probably create demand destruction all on its own.
Oh for sure, if you're not cashflow positive and are looking for Series A / Series B I expect to see the purse strings tightening up hard. Already have a few friends at firms saying they're having to be more restrictive / selective than before.
I can throw a stone to about 15 startups near where i'm at that are all in tight cash mode already, not really making a whole lot and are hoping for a big raise. None of them that I know personally have metrics that will pass the test. :(
Why is this? Aren’t credit products something that consumers have used for decades? Is there something about Klarna that makes it unsuitable to use?
If you’re talking about securing funding to do the lending, then sure that makes sense. Is that your concern or is it around the business model itself?
Not the OP, but as I see it Klarna need a steady stream of cheap credit to be able to offer their services. If that stream gets less steady and/or less cheap, the whole calculation falls apart.
Klarna seems like horrible company to work for from what I have read on HN. IQ test for interviews, mass layoffs with little self awareness, and very low pay compared to the US.
A horrible company for consumers too. Take those who can least afford to purchase something and give them purchasing power that they don't have and can't get from anyone else.
They are using a lot of dark UX patterns to trick you into thinking you paid, but then you start receiving late fees because you didn't actually pay them, even if you gave them your credit card information.
Yes, but add that with US style mass layoffs. It's like they want to have the cake and eat it too. Sweden's system usually offers a lot of job security. That's why many people don't mind working there despite the lower pay. In this case, it is not.
My company does an IQ test for interviews, but I rank it among the top places I've worked at in my career. Do you have any evidence that IQ tests are only done by companies that are bad places to work at?
It's the other way around. I've worked for a company that did (de facto) IQ tests before hiring. It was great. Everyone was intelligent, thoughtful and efficient and the company was successful. The problem was the owners (who of course had not taken any test). They were a mix of crazy and stupid, and the staff had to continuously work around them.
I don't think I would ever work for a place that required IQ tests because that would mean that they didn't not just understand the racist and ableist origins of IQ testing (which is a red flag for an employer, imo) but they also were ignorant of the fact that they don't actually tell you much. Using IQ tests as a meaningful way to measure intelligence has long been debunked by academics who study intelligence.
Terrible communication in that letter, I love brutally honest and to the point communication. Everyone's time is precious don't beat around the bush just say:
we are laying off 10% of the companies staff due to macro-economic conditions beyond our control, this coupled with decreased customer spending and hiring like this day would never happen lead us to this decision. Sorry :(
I don't think you need to be brutal about it, but being more direct would have been better here. Someone else already captured the essence, but this was all over the place and still didn't really convey that 700 people were losing their jobs.
Not everyone would appreciate your style of communication. I, for example, certainly wouldn't. Unfortunately, it would be unfeasible to customize such a letter for each employee...
> The invite will be titled “Meeting regarding your role at Klarna”.
lol ouch! They should make it a gamble where everyone has a meeting and you don't know what the outcome will be! But since thats even more resource intensive I would much prefer a mass pre-recorded zoom call over that.
I can understand that the former thing has better PR than the latter thing. But I think employed Americans are more adept at the fickle nature of their employment, whereas when the news articles go out about a mass zoom meeting firing, it gets the attention and hot takes from a bunch of more disconnected unemployable Americans and out of the loop people from other developed nations chiming in.
Right, a lay-off is a terrible experience for everyone and there’s no “right” way to do it… but there are less awful ways.
There’s 7,000 Klarna employees currently wondering if they’re losing their jobs! If they had simply informed everyone immediately, that would be just 10% of the people feeling those feelings.
Setting aside employees for a moment, from a company perspective, the harm you’re doing to your organisation by giving everyone a week to worry about being let go is ridiculous, it’s self immolation. Every single klarna employee is, in this moment, thinking about getting a new job.
Mass impersonal announcements are brutal, absolutely, but this is even worse.
What does it look like to fire someone in Europe? As an outsider, all I’ve heard is that it looks very different from the US. What does the author mean by ‘associated compensation’?
To me in the UK, "fire" generally refers to letting someone go because of incompetence, bad behaviour, or whatever - the role will still exist but the individual is let go. In which case you're entitled to whatever your contract says, which is probably "stop now and we'll pay off your notice period". Whereas layoffs and redundancies mean the roles are disappearing, the individuals being a side-effect (indeed, you aren't legally allowed to target individuals AIUI. Happy to be corrected on this, though)
I've never been fired, but I have been made redundant twice. Both times I'd not been in the role longer than 2 years which meant I was legally entitled to fuck all. First time, that's exactly what I got. Second time, the company was laying off such a significant proportion of staff that they were mandated to negotiate with those affected and come to an agreement about notice, pay, etc. They came with an OK offer; the employees requested a lot more; the company met us half way. Being entitled to nothing, I was very happy with what I ended up taking home :)
Note that they are not require to negotiate notice, pay, etc. which are already specified in contracts and statutes.
What they are required to do if they plan to make more than 20 people redundant is to conduct a formal 'consulation', which means that they have to discuss with the employees potentially concerned about the reasons and how to keep redundancies to a minimum.
Companies may offer more than they have to for the sake of their reputation and for goodwill, and (maybe especially) to make employees sign terms that they won't sue and won't discuss the matter.
You’re right, of course. Consultation was the word I failed to recall. In both my redundancies, notice periods were negotiated because both employers wanted us to work longer than our notice. “We’re getting rid of your roles, but can you just deliver this unreasonable project first?”
Depends on the legislation in the country of employment. In Sweden, the law covering this situation is LAS, Lag om Anställningsskydd, The Employment Protection Act.[1]
I'm not exactly an expert, but if you're going to lay people off you have to do it based on how long someone has been at the company. Before you can lay someone off for 'lack of work', you're also required to show that this person cannot fill another position at the company. The rules are definitely in favor of the worker in Sweden.
This has been evolving over time. There are exceptions you can make as long as they're compensated. Now those things are negotiated in collective agreements at most places or individual contracts in the rare case.[1] There are also consequences for like if they claim it's a layoff but it's a firing and so on. It's kind of complicated and getting more so.
Looking at the Wikipedia-article, it appears to apply to unionized workplaces, and Klarna is not one of them.
There are of course ways you can part with your employer that falls outside this law - you can be asked to waive your rights, in some cases against compensation. Your employer can also choose to break the law and bank on you not knowing your rights/not feeling equipped to fight for your rights.
The relevant part is this "LAS gäller för alla arbetstagare med undantag för de i företagsledande ställning. Lagen är tvingande, men kan inskränkas genom kollektivavtalsskrivelser."
The law covers all employers and employees regardless of union membership, but agreements between unions and employer organizations can limit the scope.
As you say, in practice companies will often sweeten the deal with a big severance package if they want to make changes which the law doesn't allow. I.e. get the right people to voluntarily resign instead of having the wrong people being laid off.
"Instead, if you are working in Europe, you will be offered to leave Klarna with an associated compensation"
Legislation and procedures depend on country. The quote above suggests that they intend to offer a voluntary redundancy package, which enables them to bypass a lot of hoops and red tape by offering you more than you would be legally entitled to if you agree to leave voluntarily. It is not uncommon.
In Germany and I assume similarly in Sweden, there are no "at will" work areas like most of the US is. Eliminating a position is very difficult to do because of the worker protection laws that are in place.
Usually there are a few steps that have to be followed depending on the circumstances, most of which involve providing thorough justification. Yes, the government agencies do care about this.
Further, we have periods of time after a position is severed that the company must also compensate or keep the employee employed (like notice periods, only they're on a schedule based on how long you've worked) that have to be respected by both sides unless agreed upon otherwise.
I would imagine they've figured out some sort of severance package or lump some that is a function of their salary. Just speculating.
It really depends on the country. In Denmark if a company have massive layoffs. You would probably continue working for a couple of month if you wanted to. Also the company world typically help employees with finding a new job, pay for extra training etc.
I don't think you will see much of the "you got two hours to pack your stuff and then you are out" like in the US. In Europe most people will "finish" their job independently of whether they were fire or quit them self.
In some EU countries it is common that the companies offer employees a “deal” to leave without laying off the staff. At least three months of salary in compensation is common. I know companies that handed out 3 or 6 months + 1 month for each year of employment in salary.
You may only get fired if you are deemed incompetent and have a higher position or does something silly. Not working is not enough.
For Finland fired is different from laid off. So you can fire someone if they repeatedly break instructions like OSHA related stuff, fraud or stealing and so on. Very high bar in reality. Laid off on other hand is longer process requiring negotiation between employer and employees, comes with payment from 2 weeks (under 1 year employment) to 6 months(over 12 years). Also in some case temporary layoff, like in the original meaning of term is possible. After sometime the employment continues like before with same contract and seniority.
Depends on your contract/the country... Americans here often forget that the EU isn't a single country, but countries have vastly different employment laws, like they have vastly different education and healthcare systems.
> Instead, if you are working in Europe, you will be offered to leave Klarna with an associated compensation. Outside of Europe, the process for impacted employees will look different depending on where you work. You will obviously receive more information about this very soon.
The article makes it seem like regulations in Europe (technically, the countries in Europe with a Klarna employee presence, although that's not explicitly mentioned) are similar enough, which is what the GP wanted clarity on.
> However, unfortunately, some of you will be informed that we cannot offer you a role in the new organization
What new organization? They're laying off ~10%, not restructuring the whole business, or creating a wholly owned subsidiary, or even repositioning their product. Is there some kind of legal advantage being exploited here?
There can be, laying off people in Sweden is hard and one of the ways to do it is to claim that there is no work for an employee and so doing a reorganization can make it easier to claim that. Sweden's also got fairly strict last-in-first-out rules when firing. The way the company is organized affects whether two employees are in the same "circle" and compare to one another.
I think it's sad to see a CEO who doesn't seem to care all too much about hiding the fact that it isn't just the Ukraine, inflation, and it probably isn't the recession that is demanding this. It's everything he and his team did leading up to this. A convenient way also to use points at everything around us to justify a trim and rebalance of the culture and operating cost.
I always felt that good CEOs (from a culture perspective) make it clear that in times of trouble, the first priority is not the business, but everyone working there. Sure, all that won't matter if the business folds, but Klarna is a long way from crashing and there's a hundred and one firms out there ready to pay up to keep this going.
Bizarre. People expect either (a) company management to be completely clairvoyant about what the future will hold, or (b) when their best estimates about the future change, I guess folks expect management just continue charging ahead until their company goes bankrupt.
I also totally disagree with this statement, if you're implying that you think good CEOs should layoff as few people as possible: "I always felt that good CEOs (from a culture perspective) make it clear that in times of trouble, the first priority is not the business, but everyone working there."
If anything, I think good CEOs are clear about making tough, painful decisions, and they make them quickly and move on as fast as possible. There is nothing worse than everyone seeing the writing on the wall (e.g. lots of people with not enough work to do), but feeling that management is paralyzed by fear to change it.
What's going on is really not that complex. Companies (and MANY companies, certainly not just Klarna), planned for number of employees based on estimates about the future state of the world, and that future state of the world turned out to be drastically impacted by all the events mentioned in that letter.
"if you're implying that you think good CEOs should layoff as few people as possible" — depends. It's all about the timing.
This letter didn't read (to me) like they're cautiously planning for the worst and therefore they need to make a hard decision and prepare to cut staff. It read like they're reacting to a storm that is already here. This, in my view, is not good timing. They've had the numbers for a long while now, everyone had the numbers for a good while now.
To cut 10% in one go strongly reads like they've already dragged it out.
I stand by my opinion that the management strategy here is not proactive but reactive. While that is clearly better than being paralyzed of course (I agree with you there), it's not necessarily a good sign of having things under control, no?
What's worse, to just set everyone on fire in a casual (not a quote) "you may or may not be let go, we'll see, but 10% of you are out" is also not a good way to handle it.
I accept your opinion, of course, but I think those are (for now) merely convenient side effects helping certain companies take care of more severe trimming that has been long overdue but tricky to time and communicate.
Indeed. It would have been nice if he had named the actual causes of the problems though. Inflation did not take off with the war in Ukraine, that's a red herring. Klarnauts are losing their jobs because of the knock-on effects of lockdowns, other COVID counter-measures and the massive quantity of money printing required to keep things going during that process. Printing so much money inevitably creates inflation. However it seems the CEO is too chicken to spell it out and prefers to point the finger of blame elsewhere.
Klarna feels like a feature to me, not a self sustaining business. I don't know what other capabilities they provide for merchants but I don't think BNPL can stand on its own, especially in a downturn.
1. Tells everyone that they’ll get an email in the next few days about whether or not they’re to be fired — days of anxiety ahead for everyone, and even those who aren’t being let go will be looking for new roles
2. Asking everyone to work from home, so those who are let go are isolated from their peers who they very probably want to commiserate with and say goodbye to
> 1. Tells everyone that they’ll get an email in the next few days about whether or not they’re to be fired — days of anxiety ahead for everyone, and even those who aren’t being let go will be looking for new roles
I love how half of the people will bitch that layoffs happened too suddenly without adequate warning, and the other half will bitch that they were given too much heads up.
Layoffs are hard. People will be upset no matter what. The responsibility of leadership is to make hard decisions that have the best outcome. Telling 7,000 people they might be laid off this week and so they must stay home so that the company can say “we did a personal call with each person being laid off” is an order of magnitude worse than just sending everyone an email today. People will be upset regardless, a good leader optimises for the well-being of their people, and this approach does not do that.
Not knowing who will be there when you get back, having to go into the office with the anxiety of having to be the survivors even if it is only 10%.
With that said, it's a lose-lose. Layoffs suck. It sucks to know what is happening and see people led off, just like it sucks to be the one led off with the psychologically long walk to the meeting room.
