Canva Initiates Major Restructuring With Over 1000 Job Cuts
Graphic design giant faces slowing growth and rising AI operational costs.
1Massive Workforce Reduction
Canva is cutting 1271 jobs, representing 22 percent of its total workforce. CEO Melanie Perkins described this as the hardest moment in the company's thirteen-year history. The move follows a period of slowing growth, marking the first time in a decade that the design software giant has faced such significant operational headwinds.
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 divisions will merge into a single product organization. This shift aims to restore the agility and decision-making freedom that defined the company during its early developmental stages.
3Rising AI Operational Costs
While not directly blaming AI, leadership noted that new technology is transforming user expectations and product requirements. The cost of serving AI features to over 200 million free users has significantly impacted profit margins. Consequently, the company delayed its largest AI-led software update to manage these rising operational expenses more effectively.
4Valuation and Revenue Shifts
Canva downgraded its revenue forecast to 20 percent growth 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 market concerns regarding software businesses and AI competition.
5Centralization and Hybrid Work
Sydney will serve as the primary hub for the newly consolidated product teams. Employees currently working in hybrid roles will be required to be in the office two to three days per week starting in January. This move toward centralization is part of the broader effort to streamline operations and improve team collaboration.
6Broader Tech Sector Context
The layoffs occur during a difficult year for the Australian technology sector. Companies like Atlassian and WiseTech Global have also implemented large-scale job cuts in recent months. Technology workers have borne the brunt of these industry-wide reductions as firms adjust to changing economic conditions and investor pressure regarding long-term profitability and growth.
7IPO Plans and Liquidity
A long-anticipated initial public offering, previously expected for 2027, has reportedly been shelved. Despite holding over 1.5 billion dollars in cash, the company has opted for private share sales annually since 2022. Investors are now extending the life of their funds, hoping for a liquidity event or float before the year 2028.
8Support for Departing Staff
Affected employees will receive at least six months of salary and 12 months of healthcare coverage where applicable. Departing staff are permitted to keep their work MacBooks and may apply for 10,000 dollar grants to launch their own ventures. These measures aim to mitigate the impact of the company's first-ever wide-scale redundancy round.
Original article: The Age - Technology — Canva Initiates Major Restructuring With Over 1000 Job Cuts