Klarna Reverses On AI, Says Customers Like Talking To People

Here are five things in business tech news that happened this week in business tech news and how they affect your business. Did you miss them?

This Week in Business Tech News

Business Tech News #1 – Klarna is hiring back human help after going all-in on AI.

Klarna, the Swedish fintech firm, initially replaced much of its customer service staff with AI chatbots, claiming they performed the work of 700 employees. However, due to declining service quality and customer dissatisfaction, the company is now rehiring human agents. CEO Sebastian Siemiatkowski acknowledged that overemphasis on cost-cutting led to poorer service and emphasized the necessity of human interaction for customer satisfaction. The new hiring strategy involves remote, contract-based roles targeting students and rural workers, raising concerns about job stability. This shift highlights the limitations of AI in handling complex, empathetic customer interactions and underscores the enduring value of human support (Source: Gizmodo)

Why this is important for your business:

This is a crazy story mainly because – as I’ve written here previously – Klarna gleefully announced its AI customer service platform and that’s replacing hundreds of employees. Now they’re retreating after spending God knows how much on this system. I think we’re going to see a lot of stories this year about how companies like Klarna that went “all-in” on AI, particularly with customer-facing applications, will also retreat because people like to speak with people. Ask yourself: how many times do you just hit “0” when you get automated voice answering the phone?

Klarna’s response:
“Klarna is not reversing on AI. In fact, we continue to invest heavily in AI, including rebuilding our tech stack to be AI-first. Our AI assistant now performs the work of over 800 full-time roles (not 700), and that number continues to grow. Klarna remains enthusiastic about AI. The pilot reflects a dual-track approach – combining scalable AI with high-quality human support – not a step back from automation. Klarna never eliminated human support. We still work with several thousand outsourced agents. The current pilot involves just two new agents in a flexible, remote setup – it’s an addition, not a rehire or reversal. Sebastian Siemiatkowski acknowledged that an overemphasis on cost—not AI itself—led to lower quality. The pilot is a proactive move to enhance customer experience, not a reaction to failure or dissatisfaction alone.”

Business Tech News #2 – Still ‘Google it’: AI chatbots like ChatGPT and Gemini made up just 2.9% of search traffic.

Despite the growing popularity of AI chatbots like ChatGPT and Gemini, traditional search engines remain dominant. From April 2024 to March 2025, AI chatbots accounted for only 2.96% of global search traffic, while search engines like Google and Bing attracted 34 times more visits. ChatGPT leads the chatbot market with an 86.32% share, yet it still receives 26 times fewer daily visits than Google. Emerging platforms like Grok and DeepSeek are experiencing rapid growth, but search engines have bolstered their positions by integrating AI features such as AI Overviews and Search Generative Experience. Although search engines saw a slight 0.51% year-over-year decline in total visits, they continue to be the primary tool for online information retrieval. (Source: NDTV Profit)

Why this is important for your business:

It’s true that AI chatbots are not yet taking over search this year. But watch as this number grows. It’s only common sense: why sort through dozens of websites and articles for an answer to a question when AI can summarize it all for you (as long as it’s accurate). I’m expecting to see these chatbots power search in the next few years. How does this impact SEO? People are still trying to figure this out and when I learn, I’ll share!

Business Tech News #3 – The death of spreadsheets: A tech writer shares 6 reasons why AI will soon be the dominant business reporting tool.

According to tech writer Vala Afshar, AI is poised to revolutionize business reporting by surpassing traditional spreadsheets. AI tools offer real-time data analysis, predictive insights, and natural language processing, enabling users to interact with data more intuitively. They reduce manual errors and automate repetitive tasks, enhancing efficiency. Unlike static spreadsheets, AI-driven platforms can handle complex datasets and provide dynamic visualizations, facilitating better decision-making. As businesses seek more agile and intelligent reporting solutions, AI’s capabilities position it as the future standard, gradually rendering conventional spreadsheets obsolete. (Source: ZDNet)

Why this is important for your business:

He’s right and some of the accounting tools I’ve mentioned here will help move this to reality. The mecca of AI reporting is that instead of bringing data into spreadsheets for analysis you simply ask your accounting system to generate the answers for you in the format you want – list, charts, graphs, etc. What’s holding this back is time. AI bots need to be better trained so that they’re more accurate and reliable. That time will come.

Business Tech News #4 – A Wix executive explains how its YouTube integration is helping small businesses lean into the growing social shopping trend.

Website provider Wix has integrated with YouTube Shopping to help small businesses tap into the growing social commerce market, projected to surpass $100 billion in the U.S. by 2026. This integration allows Wix merchants to sync their product catalogs directly to their YouTube channels, enabling features like product tagging in videos, live streams, and shorts. Products appear in a store tab on the merchant’s YouTube profile, facilitating seamless shopping experiences. Wix manages backend processes, including inventory synchronization and checkout, ensuring consistent updates across platforms. This move follows Wix’s successful integration with Google Shopping and reflects the increasing consumer trend of purchasing through social media platforms like Instagram, TikTok, and YouTube. By leveraging these channels, Wix aims to provide small businesses with cost-effective tools to expand their reach and drive sales in the evolving e-commerce landscape. (Source: U.S. Chamber of Commerce)

Why this is important for your business:

Shopping is becoming more visual. And it’s not just YouTube. As attention spans decrease it’s critical that smaller merchants also leverage videos on TikTok, Instagram an Snapchat to better sell their products and then drive them to their e-commerce platforms. Wix is a great, but there are others that can also be considered.

Business Tech News #5 – One year later, Target calls its express self-checkout a success.

In March 2024, Target introduced express self-checkout lanes, limiting transactions to 10 items or fewer. This initiative aimed to enhance efficiency and address concerns over theft and technical issues. Over the past year, the retailer reported an 8% reduction in average transaction times across both self-checkout and staffed lanes. Additionally, customer satisfaction improved, with net promoter scores for wait times and interactions increasing by 5 and 3 points, respectively. (Source: Retail Dive)

Why this is important for your business:

Self-checkout has received a bad rap over the years and deservedly so. As a shopper I get frustrated quickly when the devices don’t capture my actions or require a store assistant to release me from the “put your item in the bag” prison. But Target’s experience is a lesson for smaller retailers. While some customers expressed frustration over longer lines and reduced self-checkout availability, Target clarified that it has no plans to eliminate self-checkout options. Instead, the company continues to offer flexible shopping experiences, including staffed checkouts, self-service lanes, drive-up, and same-day delivery, to accommodate varying customer preferences.

Each week I round up five business tech news stories that impact your business (and mine) and explain why.