The wave of tech job cuts that so far missed Columbus has arrived, as a global buy-now-pay-later fintech company is terminating 10% of its workforce.
Klarna, the Swedish unicorn with its U.S. headquarters in the Short North, cut about 700 jobs starting Monday, citing the global economic slowdown and Russia's war in Ukraine.
CEO Sebastian Siemiatkowski announced the 10% cut in a companywide message and blog post. Each affected employee was to receive a personal calendar invitation over Monday and Tuesday, titled "Meeting regarding your role at Klarna."
"What we are seeing now in the world is not temporary or short-lived, and hence we need to act," he wrote. "More than ever, we need to be laser-focused on what really will make us successful going forward. Based on this, the senior leaders of Klarna have made some really tough decisions – some of the hardest ones we have ever had to make."
Terminated employees have announced they are part of the mass cut on LinkedIn and changed their status to "open to work."
"I am so lucky to have had the opportunity to work for such a special company," said one post from an operations manager. "There is a silver lining - I am so excited for the next opportunity!"
PayPal also cut 83 jobs on Tuesday, about 0.27% of its staff, Crunchbase reported as part of a running tally of notable tech layoffs this year, starting with 330 in January at Columbus' Root Insurance.
Since then, Central Ohio tech companies had largely avoided the industry's financial straits – some continuing aggressive hiring plans. CEOs and investors told Columbus Business First the reasons include lower operating costs in the Midwest, already conservative hiring practices and the financial cushion from last year's record funding rounds.
Gergely Orosz, who writes the subscription tech newsletter Pragmatic Engineer on Substack, posted a link an online spreadsheet of affected employees that had surpassed 330 Tuesday morning. So far 33 were listed in Columbus.
Klarna, based in Stockholm, Sweden, is a bank that retailers use as an online checkout option, usually to break payment into installments. Volume of merchandise sold through the platform grew by 42% in 2021 to $80 billion, according to its annual report.
Operating income was $1.6 billion for the year, but net losses widened to $779 million, five times the loss of 2020. Losses were $275 million in the quarter ended March 31, four times that of the same period last year, even though again sales transactions were increasing.
The U.S. is Klarna's fastest-growing market, and executives have said the Columbus engineering and operations hub fuels that success. The company planned to move to a larger Short North office one year ago after a $1 billion funding round.
