Artificial intelligence is changing the job market fast, and the first wave of risk is showing up in a place lenders usually consider safe: high earning, prime borrowers. Klarna CEO Sebastian Siemiatkowski says this shift could impact credit performance, consumer spending, and how financial institutions assess borrower risk going into 2025.

AI Layoffs Are Redefining Borrower Risk

Klarna CEO Sebastian Siemiatkowski said the rapid adoption of artificial intelligence is becoming one of the biggest forces reshaping the credit landscape.

“My concern is probably a little bit more like midterm than short term. If I look at short term, I think it looks fairly healthy… the big kind of unknown is the transformation that AI is driving,” he told FOX Business, calling out AI as a direct threat to office-based workers.

This is not following the classic recession playbook. In a typical downturn, lenders expect to see early stress among lower income households. Today the pressure is flipping. Layoffs are hitting employees with stable salaries, strong credit files, and larger financial obligations.

Prime Borrowers Are Now Feeling the Strain

Siemiatkowski highlighted that many recent layoffs involve workers who traditionally pose the least risk.

These are engineers, analysts, marketers, managers, and corporate professionals. Many have mortgages, car payments, and higher spending levels that depend on consistent income. That is why this trend matters for lenders and investors.

“These are people with more money that are being affected. It’s not the people who are doing the grocery jobs or the restaurant jobs… there’s big demand still,” he said.

Lower wage service jobs remain stable, supported by long standing labor shortages. Meanwhile, companies adopting AI are replacing knowledge work at a faster rate than expected.

For lenders, that shift means the biggest unknown heading into 2025 is not the bottom of the credit spectrum. It is the top.

Klarna Is Watching Credit Conditions Closely

Klarna plans to track these developments carefully because any broad impact on prime borrowers could affect repayment performance.

The company relies heavily on short term repayment behavior, particularly in its Buy Now Pay Later model. If well paid borrowers begin to feel strain, it may change demand for credit and the timing of repayments across the industry.

This is why the company considers AI layoffs a medium term risk while remaining confident about the near term picture.

Strong Performance Continues Despite Labor Market Shifts

Even with concerns about AI-driven job losses, Klarna delivered one of its strongest quarters so far.

Revenue Growth Sets New Records

The company reported:

Global revenue up 26 percent year over year to $903 million
U.S. revenue up 51 percent
Expectations for holiday quarter revenue to exceed $1 billion

Klarna now has 114 million active customers, with 27 million new active users added in just the last three months. This is the kind of scale that suggests consumer appetite for flexible payment options remains strong.

However, with rapid expansion comes a dip in average revenue per user, which fell about ten percent.

Loan Losses Show Improvement

Actual credit losses improved slightly from last year, reinforcing that consumers are still making timely payments.

The company’s Fair Financing installment loan product saw sales increase 244 percent from last year. Siemiatkowski explained that these products can temporarily inflate reported losses because lenders must reserve for potential losses upfront while only a portion of revenue is recognized in the same period.

After adjusting for these accounting dynamics, Klarna’s profit from transactions grew 25 percent in the third quarter. The company expects another 100 million dollars in transaction profit in the fourth quarter.

Klarna Card Becomes a Major Growth Driver

Klarna’s new debit-first Klarna Card is becoming a standout success in the U.S. market.

More than 4 million consumers have signed up since July. The appeal comes from allowing users to access credit only when they choose, not by default. It is an inversion of the traditional credit card experience.

The company is also adding rewards usually found on premium credit cards.

“People are not used to seeing this kind of credit card like rewards on a debit card,” Siemiatkowski said. Klarna expects this rewards system to accelerate adoption through 2025.

Why This Matters for Investors

The most important signal in this story is the shift in borrower risk. AI adoption is creating job instability for workers who have historically been the safest borrowers in the financial system.

That matters because:

Prime borrowers carry larger debts and larger purchasing power
A small drop in repayment reliability at the top of the credit spectrum can ripple across banks, BNPL companies, and retail spending
Traditional credit models were not built to account for AI-driven white collar displacement

For now, the consumer looks resilient and Klarna’s business is expanding quickly. The risk is in the next stage of the AI transition, where layoffs could challenge assumptions about the reliability of prime borrowers.

Investors should watch: