[mittermayr]

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.

[hn_throwaway_99]

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.

[mittermayr]

"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.

[dannyw]

No, the reason why lay-offs are happening is exactly because of inflation and the likely upcoming recession.

[mittermayr]

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.

[native_samples]

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.