Buy now pay later firm Klarna warns the Uk is heading into a recession and has announced plans to cut 700 staff. Klarna - which allows people to spread the cost of items they are buying, has blamed rising costs, a change in shopper habits and war in Ukraine.
Chief executive Sebastian Siemiatkowski said: "What we are seeing now in the world is not temporary or short-lived, and hence we need to act. When we set our business plans for 2022 in the autumn of last year, it was a very different world than the one we are in today.
"Since then, we have seen a tragic and unnecessary war in Ukraine unfold, a shift in consumer sentiment, a steep increase in inflation, a highly volatile stock market and a likely recession."
Klarna employs 7,000 people. Recession means the Uk economy shrinking for two consecutive quarters.
People across the Uk are already spending less thanks to spiralling costs of everything from fuel and energy to food and clothes.
David Beard, Founder of Lendingexpert.co.uk , said: “This is distressing news for employees of Klarna and their families. Those based in the UK should check what redundancy rights they have and dig out any income or mortgage protection policies they hold.
“This news is a sign of the times - consumers aren’t spending in the ways Klarna had hoped, and I wouldn’t be surprised if we see other lenders follow suit. The writing is on the wall for a recession”.
