Klarna laying off 10% of its staff over a prerecorded message shows how broken the company culture is 😔; Affirm's strong results & why it needs a Super App 🚀; Block’s growing payments powerhouse🔥

Good Morning FinTech, 24 May

Good day Everyone,

And happy Tuesday! Today’s issue focuses on Klarna’s severe layoffs execution that shows how broken the company culture is (bonus is a list of ~300 ex-Klarna employees that could be a good fit for your biz) as well as Affirm’s need for a Super App & Block’s growing payments powerhouse. Let’s jump straight into the good stuff:

Klarna laying off 10% of its staff over a prerecorded message shows how broken the company culture is 😔

Disclosure: I like Klarna. It sure knows how to do growth and marketing, and it has a great product (beyond just BNPL). But this is something else.

The news 🗞 Klarna, the Swedish Buy Now, Pay Later (BNPL) giant, announced that it’s laying off 10% of its global workforce, Protocol and TechCrunch reported. The company currently has about 7,000 employees, and a 10% cutback puts the number of affected workers somewhere around 700. That’s harsh.

Yet, this shouldn’t be too surprising as the company is trying to cut losses in the face of upcoming funding round at a 30% cut in valuation. I’ve written about this more in depth yesterday.

But the worst part is elsewhere.

More on this 👉 Klarna CEO Sebastian Siemiatkowski explained the situation by citing “the war in Ukraine unfold, a shift in consumer sentiment, a steep increase in inflation, a highly volatile stock market, and a likely recession” as the reasons behind the layoffs. Siemiatkowski clarified that workers in Europe will receive an “associated compensation” but added that the severance process for employees in the US will “look different” depending on location.

All would have been fine unless one thing - Klarna’s CEO delivered the news to employees in a prerecorded video message.

This shows how broken the corporate company culture is. Here’s the takeaway: