Klarna’s Customer Support Backlash — When AI Misfires

Why a CEO decided to go back to hiring humans for customer support

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From the Firehose

When Klarna, a popular financial technology company, leaned heavily into AI for customer support, it encountered a problem that many businesses now fear: bad handoffs from AI to human agents made things worse—not better.

What Went Wrong?

Klarna implemented an AI chatbot to handle customer inquiries. But when that bot couldn’t solve the problem, the handoff to a human agent caused frustration instead of relief.

The AI often failed to summarize previous interactions or provide context, so customers had to repeat their entire issue from scratch when they were finally transferred to a human. This confusion led to longer resolution times and unclear communication, leaving customers unsure whether they were speaking to a bot or a person.

As one report put it, this created “a worse experience than if AI hadn’t been involved at all” (source: Loris).

Root Causes

Several issues were behind Klarna’s disappointing results:

  • Poor integration with existing customer service tools

  • Lack of transparency—customers didn’t always know they were chatting with a bot

  • No effective context tracking between AI and human agents

This meant customers were often stuck in long, unproductive conversations with AI, only to be transferred to an agent who had no background on the issue (source: LinkedIn).

The Pivot: Reinvesting in Human Talent

After significant backlash, Klarna changed course. CEO Sebastian Siemiatkowski publicly announced a shift toward reinvesting in quality human support, noting that "investing genuinely in the quality of human support is the future direction for us" (source: Entrepreneur).

Their move sends a clear message to companies considering AI in support: Don’t cut corners on the human side. Use AI to enhance—not replace—what skilled people do best.


Takeaway: AI is powerful, but the handoff from bot to human must be seamless, with full context sharing and clear communication. Otherwise, your AI might damage trust instead of improving efficiency.


Hungry for more? Let me share a case study that really shook things up! ServiceNow changed their customer support by using smart AI agents. These cool bots now handle 80% of the questions from customers, which means real people can focus on the tricky problems. Because of this, they solved cases 52% faster and saved around $325 million each year!

This project is all about teamwork between humans and AI. The bots work day and night, so customers get fast answers anytime. And guess what? Thanks to the quick replies, customers are much happier! Want to know more about how they pulled this off? Keep reading to dive into the details!

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Klarna fixed its customer support by hiring humans for customer support after using AI for a while, customers were not satisfied with their AI system.