Canva Inc. announced a corporate restructuring that will affect 1,271 roles, or 22 percent of its global workforce, as artificial intelligence pressures the Australian design giant’s business model. Chief Executive Officer Melanie Perkins informed employees of the cuts in a memo published by Bloomberg, marking the first company-wide redundancy round in the 13-year history of the Sydney-headquartered startup.
Canva Refounds Its Sydney Design Platform After Slowing Growth
Co-founder and chief executive Melanie Perkins explained that the company needed to refound its operations and return to small, empowered teams after its growth slowed for the first time in a decade.
@canva to cut 1,271 jobs, affecting 22% of workforce The design platform says it will restructure its global operations, reorganise teams and refocus on smaller, empowered units amid slowing growth and rapid technological change. Read the full story.https://t.co/tYjCUaNevK… pic.twitter.com/uq7KbNQz9x
The workforce reduction will impact 1,271 people through job losses, mandatory relocations to central hubs, or role changes, according to BBC. Perkins described the decision in her note to staff as without doubt the hardest moment in our thirteen-year history
and told employees that small adjustments would no longer suffice, as reported by The Age.
Canva wiped $7.9 billion from its internal valuation in August, moving it from $38.9 billion to $31 billion. SEC filings revealed that investment titan T. Rowe Price marked down its Canva shares by 20 percent to an implied valuation of US$30.4 billion as of August 31, as reported by Forbes Australia. Major backers also marked down their valuations, reducing the company’s valuation by 17 percent from $42 billion to $34.9 billion, according to figures cited by Mashable. In August, Canva revised its projected revenue growth for 2026 down from 30 percent to 20 percent, representing nearly half the 38 percent growth it achieved the previous financial year and down from 45 percent the year before, as detailed by Mashable.
.@canva is restructuring its workforce, affecting 1,271 employees, or 22% of its workforce, as the design platform reorganises for the AI era. CEO Melanie Perkins said the move follows Canva’s first slowdown in growth in a decade and reflects the need to rethink how the company… pic.twitter.com/kQs3jojrAt
Artificial Intelligence Imposes Computing Costs and Existential Pressures
Yahoo Finance Australia noted that while Canva maintained a user base of more than 200 million free users, running generative AI features transformed a business model where creating designs previously cost the company almost nothing. The Age reported that co-founder Cliff Obrecht stated in August that the cost of goods to serve a user had escalated from cents per month to many more cents, prompting the company to delay the rollout of its major Canva AI 2.0 software update.
Adam Barty, managing director of Melbourne-based digital agency Revium, told Yahoo Finance Australia that artificial intelligence presents a severe challenge to software providers.
If you look at what AI models can currently do in terms of video and visual design, and then consider how those capabilities are likely to advance over the next few years, it’s pretty hard not to view AI as an existential threat to Canva’s core business model
Adam Barty, Managing Director of Revium
Canva Issues Severance Packages and Enforces a New Sydney Office Mandate
Departing employees will receive a minimum of six months of salary inclusive of statutory entitlements, along with twelve months of healthcare coverage where provided by the company, according to Business Insider. Canva is also removing the one-year vesting cliff for recent joiners, providing twelve months of access to its Employee Assistance Program (Canva Care) for employees and their families, and offering dedicated career support including coaching, interview preparation, and one year of LinkedIn Premium, as outlined by India Today.
Affected workers retained access to Slack and Gmail through the end of the week to communicate with their teams, according to India Today. Laid-off staff will be permitted to keep their company MacBooks and may apply for $10,000 grants through the newly established Canva Collective Fund to start a business or undertake local community projects, with applications closing December 14 without equity claims from the company, as reported by India Today and Mashable.
Canva CEO on laying off 22% of workforce: ‘Deeply sorry for the pain and disruption’ Canva co-founder and CEO Melanie Perkins's memo also sparked discussion on LinkedIn, where some users contrasted its tone with more corporate layoff announcements. The reactions highlighted how…
Sydney will become the primary working location for a greater share of Canva’s product teams, and hybrid staff will be required to work from offices two to three days a week starting in January, according to BBC and Yahoo Finance Australia.
Employees Gather for a Company-Wide All-Hands Meeting on November 10
Employees were given the day off on Wednesday, with further details regarding the restructure scheduled to be delivered at a company-wide all-hands meeting on November 10, as reported by Mashable and Business Insider. Subsequent organisational meetings will take place beginning November 11, with individual discussions managed according to local employment requirements across the 37 countries where Canva maintains personnel, according to Open Magazine.
#Business | Canva announces layoffs, job changes for about 22% of workforce Some 1,271 people, or 22% of Canva’s staff, will lose their jobs, change roles or relocate to central hubs, Chief Executive Officer Melanie Perkins said in a note to employees that was posted on the…