Fintech cost-cutting: The complaints at Klarna
Fintech still has its success stories but the money coming in just isn't the same as it was last year. Not everyone can afford to be in hyper-growth mode and cuts must be made. Buy Now Pay Later (BNPL) stalwart Klarna may still be able to attract executives from other top fintechs, but at lower levels, employees are voicing their discontentment at the fintech's efforts to reduce costs making life harder for them.
Klarna has a bit of a bad reputation when it comes to pay. While $100k+ salaries are bandied about elsewhere, only one engineer at the fintech unicorn has reported a total compensation of above $100k on Levels.fyi. Given that Klarna lost $1Bn last year, it probably isn't in a position to offer those huge pay packages, whether it would like to or not. Potential regulation changes in the BNPL sector are throwing a spanner in the works too. Klarna needs to put a brake on spending, and it seems its squeezing where it can.
One anonymous employee speaking to eFinancialCareers says the cost-cutting has filtered down to hotel rooms and that there's now "room sharing on corporate off-sites for non-leadership team members with justification needed for every expense above a few hundred euros."
They complain too about the "elimination of the work-from-home subsidy." Klarna's dedication to a hybrid model included "an annual payment contribution and equipment... to improve personal home office space or upgrade work accessories." Not anymore.
How bad is it really though? Klarna says its automated work from home contribution was ended in December 2021 and that home office expenses can still be reclaimed on an "as-needed basis" as long as they're pre-approved. It adds that employees can still be reimbursed for, "business related costs that are within policy."
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