Canva to Cut or Relocate 1,271 Staff in Its First Major Restructure

Co-founder and chief executive Melanie Perkins told staff in an email that the overhaul was "without doubt the hardest moment in our thirteen-year history". According to The Guardian, she did not say how many of the affected positions would be eliminated outright. The Information, citing the Australian Financial Review, which first reported the plan on Tuesday, said these are the first job cuts since Canva was founded in 2013.

What the Restructure Involves

The company said the changes focus on "collapsing layers" and bringing "more teams together in person". The BBC reported that Sydney will become the "primary home" for more of Canva's product teams, and that from next year hybrid employees will be expected in the office two to three days a week. Canva has staff in 37 countries.

"For some people, this will mean changes to their roles or being asked to relocate to centralised hubs," Perkins wrote. "Sadly, it will also mean saying goodbye to teammates and friends who have helped build Canva into what it is today."

The Guardian reported that departing employees will receive at least six months' salary and, in countries where Canva provides healthcare, a further 12 months of coverage. They can keep their laptops and apply for US$10,000 grants to start their own businesses.

Slowing Growth and AI Costs

Perkins told staff it had been "our hardest year yet" and that Canva's growth had slowed "for the first time in a decade", according to the BBC. She also wrote that "new technology is transforming what people can create, how they create it, and what they expect from the products they use."

The accounts differ on how directly AI is involved. The Guardian noted that Canva's restructure announcement did not mention AI, unlike recent cuts at Atlassian, Block and WiseTech Global. The BBC reported that Canva's value has reportedly fallen over the past year because of concerns about AI's impact on its business and the cost of building the technology into its products. Two of its backers, Blackbird Ventures and Airtree, reportedly lowered their valuation of the company from A$60bn at the end of last year to about A$49bn, and Canva reportedly cut its own internal valuation as AI expenses tied to new product launches climbed. The Information's report linked the layoffs to problems with the company's AI rollout.

Why It Matters

Canva is one of Australia's most successful start-ups and has long been seen as a candidate for a large Nasdaq listing. Its restructure adds to a run of cuts across the software sector, including 1,600 redundancies at Atlassian.

The pattern reflects pressure on established software makers, which are competing with cheaper AI-native rivals while spending heavily to add AI features of their own. Many have rejected the idea of a "SaaS-pocalypse", in which AI makes specialised software redundant, but have still reworked their business models or adopted AI tools aggressively, The Guardian reported.

Canva's core proposition, templates and tools that let people without design training produce graphics and presentations, sits squarely in the area that generative AI products now target. How it balances the cost of those features against slowing growth will be watched closely by investors ahead of any listing.