The layoffs at Klarna
blog.pragmaticengineer.com
blog.pragmaticengineer.com
This is the big thing that drives me nuts.
I don't know if it's a fragility of ego thing or what the cause may be, but it results in a corporate inability to critically self-evaluate at the highest levels. If you can't say where your weak areas are, you're not improving.
One of the experiences that untreated ADHD blessed me with was routinely failing classes. That repeated exposure to undeniable failure (and the consequences of it) really helped me accept that failure is the default. If you're not constantly fighting against failure, you're failing. You can't pretend that something didn't work out, or stop thinking about it because it hurts.
The self congratulatory back-patting (even if it's just "everything is fine, we're doing great") is treating success like an achievement. Success requires vigilance. Excellence is not an achievement, it's an activity.
We need more leaders that talk about the things we could be doing better, and doing so inspirationally, not derogatorily. It's ok that you're not the best at something. Very few are. That doesn't mean you can't or shouldn't do better.
Try internalizing that if you're not constantly struggling to do better, you're not living up to your potential.
Huh. Never thought of this. In a balanced culture, this offers no advantage. But in one still recovering from the self esteem days, when even games were encouraged not to produce any losers, I see how that awareness is competitive.
More than just failing, though, I think the lesson is learning to tolerate failure, and learning from it so that you can try again.
This is the real trick.
From my own personal experience: I went through a period of intolerance to failure -- "failure can't happen again". hypervigiliance[0] is just as problematic as negligence.
Accepting that failure will happen has allowed me to unwind quite a bit, aided in finding more empathy for others, and changed my focus to managing failure and risk. Somewahat oddly I'd come to that spot in regards to managing software in production earlier than I had been able to apply it to my own psyche.
In a way, accepting that failure happens is an optimization technique. It affords the room for curiosity and forgiveness that is required in practice to have the greatest reduction in incidents or impacts of failure over time.
tl;dr: "Perfection is the enemy of good."
>> We did so well to get here and maybe we just have not failed enough.
This really stuck with me, because in my eyes failing and having to earn each 'win' is what gets job done. Yeah, there is always someone smarter, but there are few people, who can stick to something until it is solved. I am actually saying ADHD may have been a blessing in disguise since it forced you to work harder for things others take for granted.
And that is apart from being able to see things in ways majority of population does not.
They’re no longer official principles though, and I’m not 100% sure how much they were actually acted upon while they were (at least during my tenure).
This is an interesting idea, I have I feeling I know the what they’re getting at, but if you have any examples of how they put that into practice I’d love to hear it.
AI is currently shit (too resource intensive, too biased, lots of details still to be worked on) (Micro Pessimism)
So, let's work on addressing each of this
For organizations, they could at least hire a consultant / speaker to do a presentation every year on how people can effectively give negative feedback. The speaker could say "you all see bad things happening at the company, things you aren't happy about but don't want to risk speaking about, here's how you can speak about those issues without any risk". Teach people things like, studies have shown that proposing a solution along with your complaint makes it more likely to be accepted, etc. For the price of a speaker or two, you could train your company to effectively deliver and act on negative feedback. Too many people don't know how to effectively express their problems.
If someone wants to start a consultants / speaking tour you can have this idea.
also, the complaint can be perfectly valid and important without having any solutions for it. many times employees don't have the knowledge needed to know what are the possible solutions.
but individually their solution is to go where their needs are met (as much as possible of course)
You can still do something like offer to help or proposing a meeting as the "solution", or at least the start of a solution.
But more realistically, most modern tech companies are going to want to not fire people for telling the truth or more generally speaking their minds, and individuals can often have a bigger impact than they would imagine. It doesn’t really make sense for a reasonably well run company to ignore such things from employees they clearly think are valuable.
That said, there are still exceptions, e.g. labour activism in the US is probably a good way to get fired (with a nice big severance), and if you work at Boeing and write some email like ‘this plane is designed by clowns and I won’t let my family fly in it’ (or perhaps even just reasonable concerns) that is also bad (because that email will show up in court if there’s an accident and you can’t say ‘we want to have a workplace where all engineers can raise concerns about the safety of our planes’ – better to just not do it over email, which is a bit of a silly incentive)
I agree. I gave that as an extreme example of "the fool's choice". More realistic examples include "I can tell the scrum master he talks to much in retrospectives and he will dislike me, or I can be quiet about it". Truth is you can probably find a good time and way to tell him that will not hurt his opinion of you.
As for raising safety concerns at Boeing (for example), maybe that's not a "fool's choice", but simply a choice. Are you going to do the right thing or not? Sometimes the "if I speak up, bad things will happen" mindset is the unfortunate truth, but not as often as many think.
I used to wonder why friends of mine would get gifts for things like graduating elementary school or even high school. I asked my father for something because I was graduating highschool on the honour roll, and he told me completely stoned faced "i am not going to reward you for things that you are just simply expected to do". That sticks with me 20 years later and I apply that to everything I do in life, especially work.
If you aren't succeeding, you are failing - and I was expected and taught to succeed by default.
That sounds messed up too. Maybe you need a break now and then from trying to succeed all the time.
Nitpicking, but you were expected to succeed by default, and also taught to strive for success by default (and presumably also taught the tools and approach to maximize likelihood of success). People cannot be taught to "succeed by default", anymore than someone could be taught to "win the world series by default".
And then that unpacks the challenge of this particular world view (and points at why the 'self-esteem thing' is a thing), is that learning to strive for success, and learning the tools and methods to achieve success does not mean you will actually reach success (this would just be a variant of the just-world fallacy). The challenge is how do you create the motivating factors and structure for as many people as possible (hopefully everyone) in your society/culture to earnestly strive for success, but not crack apart when they encounter continued failures.
Just making an observation that scaling this up to a population level is tricky. Easy to mangle up the nuances when trying to impart this to children. I suspect you need a relatively stable environment for this to really take hold as well. And finally, you do actually need to be able to feed the child some degree of external success to get them to actually buy into this.
why not have some joy?
you might say you do have joy, but I’ll say it doesn’t look like it and so to bring it back I wouldn’t want to work for you
This is why companies are always pushing the “winning” narrative.
to be clear I’m only commenting on how your philosophy is perceived vs how it actually feels, since I can’t know that.
I also feel very fulfilled from my personal relationships, family and lifestyle that my “success” affords me.
That is a big deal and far from a default.
Yes, now graduating high school is not an achievement, but it used to be quite one, especially for the average person.
But in the last 30 years or so, I have noticed that many now celebrate completing high school, completing primary school, or even completing kindergarten (!) — and not just something symbolic or small, but big events.
Maybe I'm just old and grumpy, but this rubs me off in the wrong way: I also believe that these "achievements" are things that you are simply expected to do. Congratulations and positive reinforcement are always welcome, but when there is an expectation of a reward then to me it crossed the line into something unhealthy.
Hilarious since Klarna has one of the worst customer service experiences I have ever witnessed.
Their real monetization strategy seems to be to get your mobile information. It is not necessary to micro-finance through them, just to do anything at all after that!
They actually have a website, which you might think would be an alternative way to manage your account, however it also requires your verified mobile device (not a phone number) to access.
Now, they never tell you any of this and none of the people that work there seem to know that this is policy and are shocked that you can't do things like check your balance, pay off your balance, basically anything you might want to do.
I feel like I need to take a shower because of how vomit-inducing that statement is.
total disconnection and bastardization of the point of the phrase
rare level of yuck here
I always thought it was intentionally derogatory in order to make the listener really think hard about what they’re outputting.
I.e. what you’re making is bad. It’s going to be bad. Force yourself to use it until you understand why it’s so bad, so that it’ll be as not bad as it can possibly be for the people you’re offering it to.
This is coming from someone who spent WAY too much time in the Enterprise software space.
https://www.centercode.com/blog/dogfooding-101
The sibling comment got it right, it started with a dog food company. Which makes more sense than a company deciding their product is shit, no?
From https://en.wikipedia.org/wiki/Eating_your_own_dog_food#Origi...
If the business keeps growing and the stock keeps going up, it papers over a lot of those problems.
Of course, when the growth stops suddenly, all the skeletons fall out of the closet.
HN is guilty of this constantly. Everyone who posts here is implicitly in the right and users unequivocally back that attitude, even when it realistically is a scenario of "maybe you were a shit employee and were fired for it and your employer isnt in the wrong?" or "your Show HN really isn't that impressive". We're not allowed to say anything critical of other HN users without being downvoted or reprimanded by dang.
So why is it any surprise that every startup company has precisely the same back-patting culture?
But I have seen tons of reactions to Show HNs that are "How is your product different from XYZ?" or "How will you address problem Foo?" Those comments actually bring something helpful to the discussion. I've also seen, in cases where the Show HN isn't something the community generally appreciates, get fair comments along the lines of "Your product just appears to make it easier to spam people. Why should we like this?"
Offering critical commentary without a point isn't something that adds to the value of the site.
I wonder why so many people in this thread seem to see this topic either black or white.
> So why is it any surprise that every startup company has precisely the same back-patting culture?
They are different because presumably coworkers are people you at least personally know in passing, and are not anonymous usernames.
We should be gracious to strangers but more critical to those whom we do know.
Valid, level-headed criticism isn’t “shitting on someone”.
My wife does call me her favorite hypocrite :)
My statement was certainly an oversimplified assessment.
> Valid, level-headed criticism
This is a good clarification to make, thank you. Ultimately this is what I'm longing for more of in the world. "shitting on" either yourself or someone else isn't helpful.
The problem with this stupid website is I (or no one else) couldn’t even properly reply to you due to censorship.
I intended to write a sample of what actually “shitting on you” would actually be, but I knew the autistic mods would ban me just the same as if I was actually doing so because they lack the prefrontal cortex material responsible for comprehension.
So engaging with you, or really in any valuable conversation on HN, is an exercise in bad faith, everyone must always wrap themselves in a thick layer of bullshit to appease the gods above or else face sanction.
You know you're welcome to make your own community, right? You're not actually being censored, you're just in a venue that doesn't support communicating how you'd like.
> I knew the autistic mods would ban me just the same as if I was actually doing so because they lack the prefrontal cortex material responsible for comprehension
You've succeeded in your goal of posting a sample of what actually shitting on someone looks like. Hint: it doesn't look good on you.
> So engaging with you, or really in any valuable conversation on HN, is an exercise in bad faith, everyone must always wrap themselves in a thick layer of bullshit to appease the gods above or else face sanction.
Engaging with society requires wrapping everything in a think layer of bullshit. Being able to show some restraint is what keeps things civil, because there's a wide range of social norms. Get a therapist and learn how to cope with it.
Again, you could also find or create another venue. You're not entitled to a platform.
People like you love to say shit like “well just go make you own platform”
Cloudfare will ban you, AWS will ban you, the investors that are poor fronts for private equity will ban you, it’s controlled. You won’t be able to take payments in your little rebel SaaS because Visa will Kneecap you.
You pretend that there’s some kind of free, open exchange of ideas where some free market determines what is popular and thus allowed for social discourse. Instead there’s the allowed discourse of the elite, which you freely participate in with glee, and worst of all you pretend you’re free.
So please keep simping like a good little serf. It does all of us good when we conform to what your institutional therapist thinks is “good” lol
Realistic, yes, but you don't have to be an ass, that's kind of how I interpret it.
These things absolutely can be said on HN, if you list some points that make you think so. If OTOH your comment ist literally just that one sentence then I don't see why it shouldn't get downvoted and flagged. This is not the YouTube comment section.
Only if what you say doesn’t oppose the current zeitgeist of the thread. I’ve seen some of the most well thought out and level headed comments get flagged to death while some insult floats to the top.
In general, the guideline is for comments to be curious and “maybe you were a shit employee” or “your Show HN really isn’t that impressive” do not sound to me like they are curious. However I realise it is hard to describe in general comments that would surely contain specific things.
An alternative strategy to the former general comment might be to try to get curious about the details more. For example one might discover that the likely cause was a breakdown in communication leaving the employee unable to understand what was actually wanted and being fired for failing to read minds to meet expectations. However I think it can be hard to actually be curious here rather than applying some kind of smug-Socratic method[2] asking innocent-seeming questions where the answers lead to one’s unwritten hypothesis, though perhaps the answers can give an opportunity to update. I think it can be doubly hard to do these things in a kind way, especially when, like in the general examples, the topics are personal to one participant rather than a typical internet discussion where parties may pretend to be disinterested.
[1] There are two common meanings of ‘critical’. One is related to ‘critical thinking’ or critiquing: looking specifically and carefully at the faults or merits of something. The other meaning is similar to ‘disapproving’. Generally the former kind is accepted here and the latter is less accepted, though I think comments which are negative and not particularly thoughtful or curious often do better than I would hope. Further, the acceptance of the former kind of critical discourse may sometimes be hidden behind for comments that perhaps fit into the latter sense (when they don’t fit I would say it is because they are too mean to really deserve to be called critical).
[2] I think this roughly corresponds to what the guidelines call cross-examining.
"Oh, you slightly smiled when everyone else did not? Not appropriate, we are a serious and professional enterprise, you should be fired and restricted to ever work in this industry again."
That said, claiming the audience is or does something specific is probably always a large generalization.
"your Show HN really isn't that impressive"
On that I do agree. The criticism is often very direct. There is a certain aspiration that product or solution x must be either the best or it doesn't deserve to exist at all. On the other hand such criticism can still be valuable if it is still received as hinting to stuff that can improve.
As a developer, if I paper over problems and claim to have resolved them, people will love me, trust me, and give me bonus pay. If I bring up problems, people consider me a trouble maker.
And when the bill comes due, I will just jump to another company.
1) from California
and/or 2) have founders that worked in California
and/or 3) raised money from VCs in California
I'm all on-board with it being better to be an optimist than a pessimist, and also on-board that destructive criticism doesn't really "serve" anyone.
But there's just this rampant over-optimism like nowhere I've experienced.
The culture of "we are awesome" to me - is culture of California.
I prefer California culture over doom and gloom and pessimism - but a little more reality, I think, is welcome.
The thing that rubbed off on me about California that I'm really grateful for is to always start with the positive. I'm definitely a happier person from getting absorbed into that culture.
But I think when you get to the point where you just completely ignore or don't speak about the negatives, it's not really helpful anymore. It's just delusion.
(Yes, SF once had a film scene. Mostly because there was cheap warehouse space South of Market usable for production.)
This. Any success, let alone wild success is highly unlikely. Just assume you’ll work on interesting problems and at some point you’ll realize either you or the problem will change in a way that makes disengaging the right answer.
Gmail filtering out invoices has been a big issue for my btw, Im forcing the government to send me invoice in print, even though they don't want to.
The HR director wrote “why it is a great time to work at X part 1” and then we did some layoffs… and part 2 was sent out the next day without missing a beat.
That company eventually stumbled and failed largely because they wouldn’t cancel a product that was clearly deficient (a far superior product was available but wasn’t invented by the established engineering manager, so they killed that product instead ).
My interpretation is that the overly positive view aims to drive the positive points forward and remind everybody about the positive things and how well things work on a macro view. If you stick small negatives in the message to cover "reality" this is what sticks.
I can't stand these motivational speech, but I also don't see a good speech for high level talks and not saying anything is bad as well and for some kind of people that seems to give them a push.
Best layoff I ever went through was when my boss came to our team and said, "look, don't tell anyone, but we have a layoff coming in a few days. I have to let one of the three of you go. Do you want me to decide or do you want to decide amongst yourselves?". She knew we were good friends outside of work and would probably make a better choice than her.
I ended up volunteering because one other guy had just bought a house and had a baby and the other guy had debts to pay off and I didn't. Ended up working with both those guys again. One of them ended up leaving and getting a new job, then he pulled me in after 1.5 years of unemployment, and then we pulled the last guy in after he eventually got let go.
Judging from your reaction, it sounds like yall had a great work environment, and that this was a good way to handle the layoff for your team. It sounds like it went smoothly, which is 100%, A+, great.
But HOOO BOY, that was a HIGH RISK move by your boss. I sincerely can't imagine the clusterf** that would've resulted from that at some of the places I've worked. Good GOD. This is an invitation for a lawsuit on a silver platter, holy guacamole.
I would not recommend this approach for most managers. :)
Obviously it's not a great signal to those who don't take it about the health of the company, and you might lose a bunch of people you'd rather not, but I think allowing some level of self-selection is good when it's possible.
1) In the end those people will leave anyways once it's obvious the ship is sinking, so I think you wind up with a double whammy of attrition.
2) Mass layoffs don't usually allow for a particularly good perspective on who is a high preformer because it's hard to vet decisions on that scale. Also this assumes that performance is the primary axis, and not cost or tenure. You will likely lose high performers along with low and medium in a top down layoff.
Layoffs don't happen when everything is hunky dory and just needs some tweaks.
Again, you have in your mind a spherical cow of a layoff.
In discovery, it’s found that person Z pinged a friend and said ‘yea, we totally couldn’t let C be laid off. What kind of person would fire a pregnant woman?!”
That’s pretty strong proof that membership in a protected class factored directly into a retention/compensation decision.
This is why managers are (/should be) trained to handle this with lawyers involved.
That said, the standard layoff protocol only got rid of one of them, and the other only left after reacting badly to the slight uptick in performance feedback (suggesting his lack of self awareness)
You are a good person.
Instead of being an actual fucking leader and making a difficult decision, your boss just said “lol so who wants to leave.”
I swear sometimes the shit I read here makes me go insane.
Bottom line is that all of the reports involved were reasonably ok with the outcome--no one is ever happy about getting laid off--and that is far better than the situation in most layoffs.
Glad your manager was able to recognize your team could handle this decision themselves. But, wow.
This was in 2015. They didn't value people back then or care to treat folks with the tiniest amount of decency. Seems not much has changed.
But generally when people feel like the best way to advance their career is to leave, then I don't think that joke works in Klarna's favour as much as they might think it does.
Till this day I get monthly balance/statement emails from them even though I have yet to use a single penny of their credit facility. Too bad they don't use all that marketing budget on competent customer experience/service.
In Europe this is popcorn time.
Its a lot of fun.
And yeah that'd be apocalyptic on your credit score - equivalent of being rejected for a car loan multiple times in a day!
On top of that even hard lookups stop affecting scores pretty quickly. They really exist to prevent someone from taking out a bunch of loans without each other loan company knowing about it.
I do know that things like the Vantage score, used by credit karma and nerd wallet, put a higher weight on these checks. This is, in my opinion, purely to drive engagement to their website. FICO is what is actually used by lenders, and tends to be more stable (in my experience).
As Klarna has expanded its BNPL offering, its losses have increased. It reported a net loss of $730 million in 2021, a 337 percent increase on its 2020 loss.
I would say its surprising that this company is still in business at all with numbers like this.
Yet the tone from the acticle is that employees appeared to think the company was successful?
(Or the ones that do see the writing on the wall and bail, or decide to ride it out as long as they can).
In the last few year many of these people have seen these companies go public, and their imaginary Options/RSUs suddenly turn to liquid assets. Company hasn't started making profits, P/E is negative, but TC has gone up by 50%-200%. That certainly feels like success.
Looking back at my own career the companies that made the least profit (including negative) are the ones that have paid me the most.
I'm old enough to remember the pre-dotcom bust chats of "new economy" and "things are different now", and how all of the stuffy old finance people who thought businesses should make more than they spend where ultimately proven correct.
For many people, even in their late 30s, the ability for a company to actually make more than it spends has been an academic curiosity, hardly relevant to the success of a company.
To their credit it did, and (to the extent your willing to believe unaudited financials) again became profitable.
I've worked at places where the slide decks were always full of exuberance. At one of them they were exuberant right up until the moment the staff found themselves locked out of the offices after being told that a liquidator was in charge.
It's not pretty.
That's interesting. My OH is almost half way through her MBA and for one recent module, she chose to analyse her current employer's financial reports and come up with a conclusion. Her conclusion is also that she needs to get out.
I wonder how many tech employees can actually read a financial report, though?
It depends. I haven't been RIF'd before but would take a package if they were layoffs if I had the opportunity. I'd also use as much of unemployment as I could for as long as I could. Basically I'd be looking to maximize the amount of time I can go before I'd need another job.
Just because a company appears to be running out of cash doesn't necessarily mean you need to leave immediately if they do downsizing.
VC funding is weird.
So sure, acknowledge a bad $300 million bet, but then throw your next $50 million at the same bet if it looks like the best place to put a marginal $50 million.
I don’t always think investors are doing this rationally - sunk cost fallacy / gamblers paradox / greater fool theory / FOMO all play a part, but also recognize that lots of these super large investments are led by a small team using lots of other peoples money so there are ways for the decision-makers to come out closer to breakeven if much of the pot is lost.
Also with potential IPO’s and sky high rate of valuation growth over the past decade, the “greater fool theory” isn’t necessarily an irrational motivation to invest.
Not all smart investments are value-based.
To make this transition, your going to need to crush a lot of dreams and projects. Why would the result not be a hollowed out hulk of a company?
There's a lot of assuming spherical cows going on. If the bean counters like the result when the average customer is milked for six years until having to replace them, that's great, unless customer service is so awful the average customer is gone in six months, or a competitor comes along in two years and wipes you out, market changes evaporate the revenue stream in five years, etc.
BTW this is the housing bubble in a nutshell. Lets say you buy a shack for half a mil at 6% for 30 years which from memory is almost exactly $3K/month. Not because you would, but because these are engineering estimates with very round numbers that are easy to memorize. Anyway, you'll spend 30 years in a row with a negative income statement of losing $36K per year on that shack. Actually you'll lose a ton more money due to maint, taxes, insurance, PMI, remodeling, appliances, whatever else. But who cares about the income statement, because if the total losses over 30 years are a bit over a million, if on the balance sheet the asset goes up to five million because interest rates only go down and real estate only goes up (until it doesn't, LOL) over the same time frame you can cash out for four million net gain? Of course if the shack only goes up to a million because its not in a bubble area like Arizona or whatever, you've not quite broken even, or god forbid if it only goes up to 3/4 of a mil you've lost quite a large life changing sum of money.
Fear mongering over employment security is a favorite tactic: https://www.nytimes.com/1997/02/27/business/job-insecurity-o...
The reality is “people need to eat”, will trade as they must to do so. We don’t actually rely on government officials to do the work; we placate the die hards by speaking in the traditions. They’re yanking on the leash they have.
Big tech looking to axe senior talent and big pay days for cheaper Gen Z grads; a quiet wealth redistribution plan. Some of the rich senior tech people would move on to cheaper locales and perhaps build businesses.
We’re in the ML era and a lot of senior folks are from the “manually program a machine” era; that’s a way over valued skill set now; it’s everywhere.
Cheaper talent with the latest collegiate training not the old ways baked in, could offset the expense of moonshots, hoping to boost an ML-backed cloud economy post generic server backed cloud.
Google’s Eric Schmidt has been in DC lobbying for AI investment: https://www.vox.com/recode/2022/6/9/23160588/eric-schmidt-am...
Picking the winners right away to avoid the last decades shotgun approach.
Every day I feel like I live the Homer Simpson quote, "I don't know how the economy works".
That is crazy if true. My fear is that there are a ton of tech companies like that, just chasing future profits or an acquisition, but not actually creating anything of value (at least in terms of profit).
I don't know. It just doesn't sit well with me knowing that a lot of products we build don't actually make any money. We're all just part of some weird system of money re-allocation and the software is just there as a signal that money should change hands.
Might be worth noting that I tend towards the depressed side already so my point of view might be a bit skewed. But when I watch Office Space or other works by Mike Judge, I realize I'm not exactly alone at least.
And keep in mind that this article is about a Buy Now, Pay Later (BNPL) type business - what about that is all that revolutionary? I'm sure the leadership wrapped it up as "empowering people to purchase goods they need today" or something else, but everyone knows they're selling people baubles like TVs with predatory lending, right?
I searched the VIN number in the state’s DMV car registration database. Well well. The car had an expired tag and had high thousands of dollars of unpaid taxes, fees and penalties against it. The owner had never bothered to pay any taxes and fees over the years. I would have to pay all those when doing the car transfer at DMV.
I was kind of pissed and disgusted. I then searched the VIN number on the web. Found the VIN in a post in a car forum for an attempt to sell the car. It had a phone number!
I searched the phone number. Got the name of the guy and his company. He was the founder and CEO of a startup.
...why are these are on the car and not on the person?
I talked to another car dealer and asked him about it. He said this kind of car was usually sold to people in another states, where their DMV won't enforce California's taxes and fines.
The lesson here is be sure to check for a clear title on the car, including DMV fees and fines, before making a purchase.
Well, thi is understandable but it doesn't explain why these fines are on the item and not on the person [who disn't paid the taxes]
Exactly. I've seen a lot of media coverage on Klarna (I'm Swedish), often with the angle "wow, innovation". The question I've too often wished journalist had asked is "Why?", what's the benefit of what you do? Except being more shiny.
Lot of waste in the tech sector. Sad how many skilled people work endlessly on more effective ways of pushing ads and loans, to make us desire and buy things we don't need with money we don't have.
No user account creation, no entering of address and credit card number. Just click purchase and confirm with BankID. I also like that they retain neatly organized purchase history across all vendors, including permanent storage of the product images.
I prefer klarna so much, that I occassionally simply go to another etailer if there is no Klarna checkout option in the first place I try to buy something.
Why not just use something like Swish?
The transaction is finished immediately. No need to de-select any "Pay later" options etc. No need to install their app on your phone.
No need to share your purchase history with some third party with an yet unknown (undetermined) monetization model. Swish is owned by your bank, and you already trust them with your transaction history.
Seems more convenient to me.
Perhaps Klarna really is better, but then again maybe that's why they're hemorrhaging money at such an impressive rate.
If a company doesn't make money, cash flow and / or profits (preferably both), it is just under cutting the competition (if smart) or on its way into bancrupcy (if not so smart) or both.
This was my attempt to explain this phenomenon. https://news.ycombinator.com/item?id=32453161
Wikipedia- "First CityWide Change Bank – Two ads promote a financial institution whose only service is providing change (e.g. "you come to us with 16 quarters, 8 dimes, and 4 nickels, we can give you a 5 dollar bill"). How does First CityWide make money doing this? As one service rep says it, "The answer is simple: Volume"."
They charge a commission now, but originally, they didn't. They pitched the system to stores as a way of freeing up cashier time wasted counting coins.
And if your numbers are right then you, more or less, want to spend as much money as you can buying customers. So that's how companies with numbers like this continue to operate.
To put it simply, Klarna is spending a billion dollars to buy customers that will generate more than a billion dollars in revenue. The catch is that you have to pay now for later revenue. So your numbers look like crap until your existing customers far outnumber your new ones.
A 55 year old is the most productive member of a society, but that is also the age where you start to consume very little.
Imagine if you had to 'save' to get your college education, your home, a laptop, or starting a business. There is a reason we don't ask babies to 'pay up' for milk or shelter.
Imagine if Larry Page or Sergey Brin had to work and save to start Google.
Imagine if government had to save trillions of dollars before investing in Carbon Capture and renewable energy generations.
Yes, all good things can be abused. But you can't prevent good things for 95% society because a 5% of the society abuses it
I do however think consumption debt, for goods such as clothes or the next iphone, is harmful.
They're not investments, like an education or a car.
It's a tax on people who don't have money in the bank to buy such things up front.
Usually such loan "services" are marketed in a way that hides the effective cost of the loan to the customer. Especially problematic for young people less experienced handling money.
> But you can't prevent good things for 95% society because a 5% of the society abuses it
Sounds like you thought I suggested prohibiting debt in general. That's a misunderstanding. It's definitely possible to prohibit predatory lending strategies.
I rather travel the world, eat great food, take tennis lessons, dance into the night when I'm in 20's and 30's where I get the most enjoyment rather than in my 60s where my body is not in good physical shape to do any of those things.
The fact that I travelled the world in my 20s may also enhance my own future productivity.
I would even further claim that not enough people go into debt. There are plenty of young people (70% or more) in developing countries who can get into travel, education, iPhone/Samsung, great food debt and their country (and the rest of the world) will benefit immensely from it in the long run.
You can't loan for consumption in your 20-30s, planning to pay it back in your 40s and 50s. Klarna does not even offer loans beyond 36 months, and month 1 to 36 you have 20% interest rate! If you skip a payment there are steep fees.
Klarna is for short term loans. Like, half a month.
Klarna is definitely not offering their service to poor people in developing nations. Even if they did, how would a 20% interest loan for an Iphone help anyone escape poverty?
As a private tech company I would assume that they are using the broadest possible definition of revenue.
Klarna pays the vendor immediately (with its credit line), and the user enters into a sort of debt contract with klarna.
Klarna's revenue is what it receives from the user.
It's a great business model when the interest rate is 0%.
Implying that transaction volume is on the order of $200 billion? No.
For perspective, Amazon's 2018 revenue is $230 billion.
Edit: not "most likely" - apparently they lost to the tune of $700M
it is a good metric for number of employees you employ :)
I worked for a company that didn't let people know if they where safe, for a week. A friend worked for a company that didn't let people know for 3 months. It's beyond stupid, people becomes nervous and starts looking elsewhere and it's always the best people who leave first.
That being said: Why does Klarna have 7500 people employed? I feel bad for the people who will be losing/have lost their job, but they also won't be the last in tech. Klarna have done what Google, Twitter and other have done, hired people they didn't need, so now productivity per employee is too low.
15 years ago I worked for a company that used Klara for payment, right when they started to expand beyond Sweden. The experience was interesting to say the least. They where completely naive about fraud. They didn't understand the markets they where trying to expand to. If everything else failed, payback the customers and let the retailers deal with any loses.
While I'm sure they improved, based last my experience with them in 2016, I don't see how they could be ready to enter the US market.
Finland has in some respects even more stringent employment laws than Sweden. If a company is laying off people, it needs to "negotiate" with employee representatives for a set amount of time. For small companies or small layoffs, the time is two weeks, but if there are at least 30 employees and the layoff affects at least 10 of them, the negotiation time is six weeks. Companies typically say at the outset which employee groups are affected but delay the decisions about individual employees to the end. I don't know if this is by law, but I suppose that saying sooner would be an opening for a union to claim that the negotiations were not done in good faith, and possibly sue the company.
Having been a potentially affected employee on two occasions and an employee representative on one of them, let me say that waiting six weeks for the decision is not fun for anyone.
Whenever ive been a manager for the last 7 years its the same. One day you get a ping for “can you onboard X”. It doesn't matter if you had work for one more person or not, thus projects are created for them to do something.
Thinking about it, I guess they hoped to make people jump ship before they were pushed, but it destroyed any semblance of a good relationship between employees and management/HR.
When referring to productivity, what do you mean in this case? For Google, their profit per employee is still very high (about $300k [0]). Of the top 10 biggest employers in that list, they are 3rd-highest-earning per capita.
When it happened to us there was no announcement from the CEO. Sebastian had actually just gone on parental leave and one of the co-founders, Niklas Adalberth had taken the reigns.
At the time, my suspicion was that it was because Niklas Adalberth was getting rid of people he didn’t like and that the main reason my firing in the way it was done.
I was invited to an external meeting room at 17:00 in the Stockholm office with my boss and my boss’s boss, where they proceeded to tell me “we think we need someone else in your position”.
My boss looked helpless and sat quietly the whole time. My boss’s boss did all the talking and seemed just like someone following orders.
Reading this now it’s sad to see how nothing has changed at Klarna and makes me think that even if Niklas did had something to do with my firing that it couldn’t have happened without Sebastian’s knowledge and approval.
My experience of Sebastian was that he was a talented product guy, but unfortunately seems to leave a lot to be desired as CEO.
> Swedish companies must negotiate with unions before layoffs. However, this was not the case at Klarna, nor is it the case at most Swedish tech companies. Klarna does not have a collective bargaining agreement (called “kollektivavtal” in Swedish) in place. This means that Klarna as an employer is not forced to negotiate layoffs with a union. Instead, Klarna is entitled to negotiate directly with each affected employee, which they are doing.
Klarna is also pretty big (7500 employees according to the article) so I imagine it doesn't have to do with the company size.
Source (Swedish law): https://lagen.nu/1976:580#P13S2
Google translated:
> If the employer is not bound by any collective agreement at all, the employer is obliged to negotiate in accordance with § 11 with all relevant employee organizations in matters relating to dismissal due to a lack of work [...]
Also, they have to give six months notice to the unemployment agency if they plan to fire more than 100 people.
To sidestep it then just requires bargaining with the individual rather than a union.
Unfortunately it can take a while for employees who have relocated to Sweden to consider joining a union. It took me about a year or two after moving here to realize it was a thing, and such a normal thing at that. I can imagine that Unionen et al would have gotten more than a few phone calls from Klarna employees asking for advice during/after this whole thing.
Edit: Was curious to find some numbers about this. I don't read Swedish fluently yet so having to use Google Translate, but one report I found from 2020 says that "Information and communication" (which I suspect IT/software engineering might fall into) has 69% membership [0]. It seems to say white collar workers actually have a higher membership rate than others at >70% overall; will look some more and add any other numbers I can find.
[0] - (page 13) https://www.lo.se/home/lo/res.nsf/vRes/lo_fakta_136602747878...
The gaming industry is notorious for not having collective agreements (as per the article, only 1% of the companies has it). So I'm not sure your experience is representative.
My impression is that he wants to be like the cool kids on the other side of the Atlantic. Meanwhile the Engineering union and Bankers guild are suing Klarna for the way the layoffs are being done. Maybe they are pissed. Dunno.
>Being hostile to unions seems like a normal thing for some other parts of the world, but seeing a Swedish employer talk like this about union membership here immediately leaves a bad taste in my mouth about the company. It's a red flag.
is the reason for this:
>I was actually surprised to read that the Swedish CEO "took a dab at unions". Sure, relationships with unions can be complicated, but I've never heard an employer talk negatively about them here (maybe I'm just sheltered?).
No point speaking honestly in an environment where they can be punished for doing so, either socially, or legally, particularly when speaking provides them no benefits.
[Plus, I really liked the company. Had been there longer than in any other job, and it was where I wanted to be when retirement came. Wasn't to be, however.]
Here’s a relevant You Need A Budget podcast episode for those looking for more on this topic: https://open.spotify.com/episode/0Z9NQoseq5nvutAInURR2r
It is impossible for someone who leads a company like that to be a good person. Why would anyone be surprised at them being heartless to their employees?
Actual superstars are happy to take advantage of what the Screen Actor's Guild does for them, just as the crew working on their shows are also happy to have their union, the writers are happy to have their union, and so on.
You can also be put on gardening leave when you are fired, if there's a notice period there.
Handover is always a messy topic, and often good handover is sacrificed at the altar of security/liability.
If I had a job the next day I might just enjoy two salaries. Would this be blocked by a garden leave agreement?
Obviously it caused me to click the link, but it seems like a lot of excruciating detail about internal company process.
I guess its useful for potential future Klarna recruits.
And there’s an even longer extended version behind a paywall! https://newsletter.pragmaticengineer.com/p/layoffs-at-klarna
Those 6,000+ retail investors who FOMOed and bought in are now down more than 80% of their investment due to the down-rounds, with the private early investor escaping and banking $8 million. So it is no surprise that the layoffs had to happen especially with the recent rate hikes which are accelerating the costs at Klarna.
[0] https://www.crowdcube.com/cubex/klarna
[1] https://milled.com/navia/klarna-pitch-is-launching-tomorrow-...
[2] https://www.thetimes.co.uk/article/online-investment-platfor...
They were not told that there would be any layoffs, and when their employees came and asked them what it was all about there was no support from the top so they had to just tell everyone "I don't know". What an awful position to put people in.
The article is a very good write up of what happened. I'm going to talk about what the current internal situation is and how people are feeling based on what I'm seeing.
Since the layoffs there has been a noticeable shift in atmosphere. Previously quite a few people would regularly come to the offices, now not so much. Some still do come but significantly less. Performance has gone from people often going beyond what was expected to "I'll do enough to keep my job". A colleague who was previously very keen working for Klarna and would often work a good 11 hours+ is now "disenchanted" and doesn't quite know what to do with themself.
Job satisfaction and overall happiness has rapidly declined and is still going down. Some departments do internal anonymous surveys where people outright get asked if they are happy at work. From the ones I saw, every single one had a drop of at least 20%, some significantly more. Participation rate of those surveys has also declined. Most people I spoke to outright said they're not participating anymore because they're on the way out.
A good 50% of the people I asked, outright said they are looking for a new job. I expect some are not sharing because they want to keep it a secret. I'm expecting my team to loose about 40% of its members within the next 5 months. As far as I know, there is only replacement hiring, no active hiring.
One of my very talented colleagues that I have been working with for 3 years got laid off. During a chat with our direct supervisor I asked them if they could tell me the reason. Trying to reassure me, they said I had nothing to worry about and that my colleague wasn't fired for poor performance but other internal reason. I knew this colleagues salary so I also know they weren't let go because of their high salary. Since then my team has an open position that is hiring for this exact role. Make of that what you will.
As you might have read from the article, communication was absolutely horrendous. One of the key things I'd like to mention is that Klarna always promoted open and frequent communication. Only this was never practiced by the C-Level. This was incredible apparent during the layoffs. Many people had questions but C-Level was dead silent and let HR people "manage" the fallout. My colleague had their meeting at the start of the working day on Tuesday (layoffs were announced the day before). My supervisor got told of the layoff 15 minutes before my colleagues meeting. Informing my supervisor was done through a 3 sentence slack message.
2 weeks after the announcement, quite a few pregnant women came forward that they also received an offer. Additionally, a lot of people on long term sick leave were contacted. Since the layoff decisions weren't made centrally, I doubt these groups we're specifically targeted but Klarna is, in comparison to the average Swedish company, quite international. I know of at least one case from a decision maker (not C-Level) that a woman was laid off because she was 8-months pregnant and due to go on her maternity leave. I'm not going to speculate on what, if any, legal actions are following from this.
Another one of my ex-colleagues told me he was doing two jobs, but only working 8 hours in total per day, if that.
Then COVID layoffs happened. In the first case, the company simply turned off the logins - it was their way of laying people off (one laid off guy had been with the company for 15 years, another one had health issues and needed the insurance). In the second guy's case, they told him one Friday afternoon that it was his last day. We were in different teams at the time, but neither of us had any work, despite asking our respective managers for work daily. He got frustrated with having no work and took another job. Also, it took them three more months to give us the last two paychecks (for two months).
Both times, I thought my colleagues were nuts and were unethical - doing second job, not giving notice etc just felt ugly. Now I feel different. If employers treat employees like crap, why should any employee show any loyalty? When my colleague was laid off, he didn't care, as he was already had another job. I on the other hand, spent the next month looking for one.
In every contract job I worked, the first thing they say is "you can (and should) work more than 40 hours if we need you to, but you can only bill us for 40 hours".
If this is the treatment in a sophisticated, (relatively) high paid industry like software, I wonder how people are treated in service industries, retail etc. No wonder so many workers are striking and trying to unionize... Maybe it is time for software developers to unionize too
That means if I want to leave I need to give 90 days notice and if they don't want me any more I get 90 days notice of that or I get 90 days pay immediately.
This also leads to "Garden leave": https://en.wikipedia.org/wiki/Garden_leave
As I understand it Garden Leave is not uncommon in the US... for executive level jobs. The guy cleaning the hallways is lucky if they remember to tell him not to come in tomorrow rather than just locking the doors and not paying him any more.
In a lot of countries this is illegal, you need to prove a cause for firing anyone. One of the reasons klarnas firings in Sweden have been controversial and complicated is that they specifically tried to sidestep that by "firing people" by getting them to resign and accept a deal. They would not be able to just outright fire people without negotiating the terms, and those terms are usually based on a LIFO queue.
> One of my ex-colleagues simply quit one day - no emails, no notice...nothing.
Some people don't want to leave with fanfare, but notice is basically required in sweden (again, using sweden as a comparison since the thread is about klarna).
> Another one of my ex-colleagues told me he was doing two jobs, but only working 8 hours in total per day, if that.
If they were dishonest about that then that does not look great IMO. If they weren't and both companies were fine with it then it seems OK.
He was billing the companies 8 hours a day, each. Is this unethical? Sure. But he had no work for weeks and weeks, despite asking his manager daily about it. He was on FaceBook first, then Netflix, finally got himself a second job. Until they laid him off, with 2 hours notice on a Friday afternoon.
This is what happens when employers treat their employees like crap. I have zero sympathy for most employers these days.
And yet, I found myself reading this in a riveted fashion. Why is that? Is it just the macabre nature of humans to slow down when passing accidents? My anxiety about how the little guys world can suddenly be turned upside down? I'm honestly intrigued why I couldn't quit reading this.
What were the people doing?
However, this super app never launched as planned. Internally, confusion arose when it emerged the super app would use scraped data from customers who were already partners of Klarna. The super app efforts are still progressing slower than originally planned, and some employees think the company is spending too much on this area for too little return.
Trying to come up with something out of nothing it seems
I don't understand it myself, but that's what happens.
Right? If they are even somewhat productive, there should be enormous output created by them.
So even if they could proactively leverage their synergies using mobile apps or whatever their secret sauce was, activities like, I donno, collections maybe, still scales up linear with size like legacy companies.
Putting that aside (since all tech companies will lay off new joiners), I don't think this story points to any (cultural) problems at Klarna.
Layoffs are always tough and people will be unhappy. Based on the timelines presented in the article, everybody knew within 1-2 days whether they are affected or not, and affected people got a good severance package. By "good" I mean more than Klarna had to pay based on the law, based on the article.
It's important to remember that 99% of working people in the world would not get this deal in a layoff.
I think we (tech workers) need to stop expecting to always be treated as unicorn snowflakes (esp. in the current market conditions).
If you are in a money problem environment maybe start with transparency and freezing of things like hiring? There just seems to be 100 better ways to approach this
I have heard this line a few times for HR recently and it makes me cringe every time. Putting everyone in the same shitty boat is never fair. Takes me back to George Orwell’s Animal Farm every time!
OR
The employer can just buy the 5k plan for you tax free, and pay you 5k instead. This means you have 4k left over after tax! This is because healthcare plans are not taxed if provided by the employer.
Incredibly retarded, yes, it is.
[0]: https://www.ehealthinsurance.com/resources/individual-and-fa...
And still people in this industry will forever think that unions are a waste of time.
> There’s few better adverts for unions than a CEO condemning them, while wielding the ax on people’s jobs.
Heh. Yeah, bit of a footgunning, that.
> Headwinds for the 17-year-old startup started before the war in Ukraine sent a chill through public markets.
WTF does the word "startup" even mean, if it can be applied to something that's seventeen years old?
___
[1] https://www.forbes.com/sites/iainmartin/2022/05/28/klarna-ch...
Layoffs sucks no doubt but I cant say I feel as "outraged" as the author seems to intend. My current employer cut 10% of the workforce about 3 years ago (1800 ppl).My preevious one did that twice (about 3500 people in total). Another former employer would cut 2-3% every other month or so. Then go on a hiring spree, and then cut again.
Laying off 5% every year Microsoft style because of a crazy in house performance review system, now thats a news worthy evil story. This is just standard bad management vs profit margin not really interesting.
Yea Sweden, it happened to you too. Welcome to the club.