Canva cuts or reallocates 1,271 roles, 22% of workforce

Canva will cut, transfer, or redesign 1,271 roles, representing 22% of its global workforce, in the company's first round of layoffs in its 13-year history. The announcement was made by co-founder and CEO Melanie Perkins in an email to employees on Wednesday (4), Sydney time, and was also published in the company's press room.

"Our growth has slowed for the first time in a decade," wrote Perkins, adding that "small changes will not be enough." She described the process as a "re-founding" of Canva, returning to "smaller, autonomous teams". The 1,271 affected will not all lose their jobs: some will be laid off, others will change roles, and some will need to relocate to central hubs. The company did not disclose how many are in each group, nor how many are in Australia.

What changes in the structure

The product, growth, and platform areas will be merged into a single product organization, eliminating management layers and combining specialized roles into broader positions. Sydney, where the headquarters is located, will become the main base for more product teams. Those who are leaving will receive a minimum of six months' salary and 12 months of health insurance in countries where the company offers the benefit, according to reports from the Sydney Morning Herald and other Australian outlets.

The financial context explains the urgency. In August, Blackbird, Canva's largest venture capital investor, reduced its valuation of the company by 17% to $34.9 billion, in a move that was also followed by Airtree. Reports from the Australian press also cite the rising costs of AI as a pressure factor on margins.

The AI question Canva avoided answering

The most debated point of the announcement is what it does not say. The company stated that AI guides the products it builds and how it delivers them but that tasks performed by people will not be delegated to AI systems. Perkins mentioned "rapid technological changes" and new user expectations without attributing the cuts to automation.

There are two possible errors in interpretation. The first is considering the cuts as proof that AI is replacing designers and engineers: Canva itself denies this, and the restructuring design, which merges areas and eliminates middle management, seems more like a correction to slowed growth than automation of tasks. The second error is accepting the denial uncritically. Canva sells generative AI tools that do part of a designer's job for the client. A company whose product reduces the need for creative work from customers is unlikely to remain immune to the same effect internally, and the combination of specialized functions into broader roles is precisely the type of change that AI tools make viable.

The distinction that matters for the executive reader is on another axis: Canva's problem is growth, not productivity. A rapidly expanding company hires to meet demand; when growth slows for the first time in ten years, as Perkins acknowledged, the same structure becomes a cost. AI enters as dual pressure, increasing the cost of serving each user with generative resources while simultaneously lowering the barrier for competitors offering embedded image editing in other platforms.

Where the cut lands

In Australia, Canva is the country's most valuable tech startup, and the revaluation of $34.9 billion made by Blackbird and Airtree directly impacts the performance of two of the region's leading venture capital funds. The company's first round of layoffs in 13 years also changes the reference of stability it represented for the engineering and product market in Sydney.

Outside Australia, the company maintains offices in cities such as Manila and London. The decision to concentrate more product teams in Sydney and require relocation to central hubs raises the question for those working in these offices, in the Philippines and the UK: how many of the 1,271 affected roles are outside the headquarters? Canva has not disclosed the geographic distribution of the cuts as of this article's publication.

For consultancies and companies that use Canva as a corporate tool, the immediate effect is limited: the product does not change with the restructuring. The long-term signal is about pricing. A company pressured by AI costs and investors who have lowered their valuation has an incentive to review the pricing of generative resources in corporate plans, which is the item that software buyers should monitor in their next contract renewal.