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Klarna says its AI assistant does the work of 700 people after it laid off 700 people
(www.fastcompany.com)
this post was submitted on 28 Feb 2024
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Often companies have layoff packages that pay workers X months of pay as a severance agreement, doesn't that mean they would be paying triple wages for some number of employees? Wouldn't that bring their costs up?
Good points!
The timing is quite important. Other things to consider are tax periods, bonuses, and nature of the markets. That can all be racked up as cost of doing business if the long-term benefits outweigh the long-term costs.
Especially if they are having a bad year or quarter, performing layoffs can show promise of a better next quarter since severance is basically a fixed cost to the number of employees you have.
There isn't necessarily one size fits all but the bottom line is dropping employees saves money as human resources are always one of the largest costs of operating.
Thanks for the explanation