Klarna's $40M AI Mistake: Why Replacing Humans Backfired

I've spent 15 years learning fingerstyle guitar. AI can replicate the notes — but not the feeling. That's the same lesson Klarna learned the hard way when they laid off 700 customer support agents and replaced them with AI chatbots. By mid-2025, CEO Sebastian Siemiatkowski admitted they "went too far" — cost savings came at the price of quality, empathy, and customer trust. Now they're rehiring humans. In this video, I break down exactly what went wrong, how AI customer support agents actually work under the hood (LLMs, prompts, memory, tools), and most importantly — how YOUR business can implement AI the right way without losing the human factor. This isn't anti-AI. This is pro-human leverage. *Timestamps* 00:00 The "AI Will Replace Humans" Myth: why AI Can't Replace Human Artistry 01:17 Klarna's AI Layoffs: What Happened and where it went wrong 03:28 Limits of AI 04:22 When AI Works Well: FAQs + Human Handoffs 05:09 Inside an AI Support Agent (Prompts, LLMs, Tools) 07:28 Voice vs Chat Agents: The Reality 09:54 How to Do It Right: Keep Humans in the Loop 11:56 The Real Win: Upskilling Teams + Better CX 13:50 Build AI That Amplifies Humans Join my free Skool Community for Free Templates: https://www.skool.com/go-to-market-ai... Need AI? Book a free consultation with me: https://link.elevatewisely.com/widget...