Canva Announces Major Restructuring and 1,271 Job Cuts
Graphic design giant faces slowing growth and rising AI-related operational costs.
1Massive Workforce Reduction
Canva is cutting 1,271 jobs, representing 22 percent of its total global workforce. CEO Melanie Perkins described this as the hardest moment in the company's thirteen-year history. The move follows a significant slowdown in growth, marking the first time in a decade that the design software giant has faced such performance challenges.
2Refounding the Organization
The company plans to refound its internal structure by returning to small, empowered teams. Management layers will be reduced, and product, growth, and platform teams are being merged into a single organization. This shift aims to restore the agility and decision-making freedom that defined the company during its early developmental years.
3Rising AI Operational Costs
The cost of serving over 200 million free users has surged due to AI integration. Co-founder Cliff Obrecht noted that the cost of goods per user has risen from negligible amounts to significantly higher figures. Consequently, the company delayed its major AI-led software update to protect its overall profit margins this year.
4Valuation and Revenue Pressures
Canva downgraded its revenue growth forecast to 20 percent for this year, down from 38 percent in 2025. Major investors, including Blackbird and Airtree, have slashed their valuations of the company. Blackbird reduced its valuation by 17 percent to 34.9 billion dollars, reflecting broader investor concerns regarding AI impacts on software businesses.
5Operational and Office Shifts
Sydney will serve as the primary hub for the newly consolidated product teams. Hybrid employees are now required to work from the office two to three days per week starting in January. The company maintains operations in 37 countries, with local requirements dictating the specific timing of employee notifications and departure processes.
6IPO and Investor Outlook
A planned initial public offering, once anticipated for 2027, has reportedly been shelved for now. Despite holding 1.5 billion dollars in cash, the company has opted for private share sales annually since 2022. Investors like Airtree have extended fund lifespans, hoping for a liquidity event before their current investment vehicles expire in 2028.
7Support for Departing Staff
Affected employees will receive at least six months of salary and 12 months of healthcare coverage. Departing staff are permitted to keep their company-issued MacBooks and can apply for 10,000 dollar grants to launch their own ventures. Access to internal communication tools like Slack and Gmail remains available until the week ends.
8Broader Sector Context
This restructuring occurs during a difficult period for the Australian technology sector. Companies like Atlassian and WiseTech Global have also implemented significant workforce reductions this year. These moves highlight a wider trend of tech firms prioritizing profitability and operational efficiency over rapid expansion as global economic headwinds continue to challenge software valuations.
Original article: WA Today - Technology — Canva Announces Major Restructuring and 1,271 Job Cuts