Canva Lays Off 1,271 Employees Amid Strategic Restructuring
The design platform cuts 22% of its workforce to streamline operations and address slowing growth.
1Massive Workforce Reduction
Canva has announced the layoff of 1,271 employees, representing 22% of its total global workforce. CEO and co-founder Melanie Perkins described this as the most difficult moment in the company's thirteen-year history. The decision aims to address significant operational challenges and adapt to a rapidly shifting landscape within the digital design industry.
2Severance and Support Packages
Departing staff will receive at least six months of base salary, regardless of local labor regulations. The company has removed the one-year vesting cliff for stock options to ensure immediate equity access. Additionally, employees can retain their company-issued MacBook computers and receive one year of LinkedIn Premium to assist in their job search.
3Entrepreneurial Support Initiative
Canva has established the Canva Collective Fund to support former employees pursuing independent ventures. The fund provides 10,000-dollar non-repayable grants to those launching their own businesses. The company explicitly stated that it will not claim any equity or ownership stakes in these new startups, offering a clean break for departing entrepreneurial talent.
4Organizational Structure Changes
The company is unifying its Product, Growth, and Platform divisions into a single, streamlined structure. This consolidation is designed to reduce communication friction between teams and eliminate redundant specialized roles. Furthermore, Canva is reducing its middle management layers to increase operational agility and speed up decision-making processes across the entire organization.
5Centralizing Operations in Sydney
Sydney will become the primary hub for the company, with several development teams being relocated to the city. Starting in January, employees under hybrid contracts will be required to work from the office two to three days per week. This shift marks a move toward more centralized, in-person collaboration for the remaining staff.
6Financial Performance and Forecasts
Canva closed 2025 with 3.5 billion dollars in net sales, yet growth has slowed for the first time. The company has revised its 2026 revenue growth forecast downward from 30% to 20% annually. Despite maintaining a valuation between 40 and 42 billion dollars, the firm is proactively adjusting its financial outlook for future stability.
7Market Pressures and Competition
The layoffs are driven by intense competition from new companies built specifically around generative artificial intelligence. Additionally, Canva is facing a decline in conversion rates for users upgrading to paid subscription plans. These factors have forced the leadership to pivot their strategy to maintain competitiveness against emerging AI-native design platforms in the market.
8Strategic Future Outlook
This restructuring ends a long period of aggressive expansion for the design giant. By simplifying its internal architecture and focusing on core product development, Canva intends to navigate the current market volatility. The company's future success now depends on its ability to integrate AI effectively while converting more free users into subscribers.
Original article: Open — Canva Lays Off 1,271 Employees Amid Strategic Restructuring