Canva Cuts 22% of Staff in First Layoffs Amid Growth Slowdown
Design platform Canva is laying off 1,271 employees, representing 22% of its workforce, marking its first job cuts since founding in 2013. CEO Melanie Perkins cited the first growth slowdown in a decade and ballooning AI infrastructure costs as primary drivers. The restructuring includes merging teams, reducing management layers, and shifting to a hybrid work model, reflecting a broader industry pivot toward cost efficiency.
Key points
- Canva, the Australian design software company, is cutting 1,271 jobs, which equals 22% of its global workforce, in its first restructuring since its 2013 founding.
- CEO Melanie Perkins stated that the company experienced its first growth slowdown in ten years, prompting a strategic shift to reduce communication friction and subspecialization.
- The layoffs coincide with a revised 2026 revenue growth forecast of 20%, down from 30%, as the company attempts to manage rising costs associated with its proprietary AI models.
- Early investors reduced Canva’s valuation to approximately $35 billion earlier this year, reflecting concerns over the company's financial trajectory and market positioning.
- The restructuring plan involves merging Product, Growth, and Platform teams, flattening management hierarchies, and requiring most hybrid workers to return to the office several days a week starting in January.
Canva Announces Major Workforce Reduction
Canva, the global design software platform, has initiated its first significant workforce reduction since its inception in 2013. The company confirmed that it is cutting 1,271 positions, a move that affects 22% of its total staff. This decision marks a pivotal shift for the company, which has historically been characterized by rapid expansion and minimal turnover. Co-founder and CEO Melanie Perkins addressed the workforce in an internal note published on Wednesday, describing the situation as the "hardest moment" in the company's thirteen-year history. While the specific number of employees facing termination remains undisclosed, the restructuring will also involve role changes and potential relocations for certain staff members.
Drivers Behind the Restructuring
The primary catalyst for the layoffs is a deceleration in corporate growth. Perkins noted that Canva experienced its first growth slowdown in a decade, a significant departure from the trajectory that propelled the company to widespread adoption by hundreds of millions of users. This slowing momentum was previously signaled in August when Canva revised its 2026 revenue growth forecast downward from 30% to 20%. The adjustment was attributed to escalating costs associated with artificial intelligence infrastructure. Although the company has been developing and shipping its own AI models to reduce reliance on third-party providers, these efforts have not yet offset the financial burden, leading to a reassessment of operational efficiency.
Strategic Organizational Shifts
Beyond workforce reductions, Canva is undertaking a comprehensive structural overhaul. The company is merging its Product, Growth, and Platform teams into a single Product Organization to minimize communication friction and streamline decision-making processes. This consolidation is accompanied by a reduction in management layers and a move away from narrow subspecialization. Employees will be expected to take on broader responsibilities, reflecting a strategy to create more agile and self-sufficient small teams. Perkins emphasized that minor adjustments would be insufficient, stating that the company needs to "refound" itself to adapt to a rapidly changing technological landscape where user expectations and creative tools are evolving.
Return to Office and Geographic Consolidation
As part of the restructuring, Canva is tightening its remote work policies. Starting in January, most employees previously classified as hybrid workers will be required to work from the office several days a week. Additionally, the company is consolidating its operations, with Sydney, Australia, becoming the primary base for product teams and other key roles. Some staff members may be asked to relocate to Sydney to align with this geographic consolidation. These measures are intended to foster closer collaboration and reduce the complexities associated with a distributed global workforce.
Market Reaction and Valuation Impact
The workforce reduction comes against a backdrop of declining investor confidence. Earlier this year, Canva’s early investors, along with the company itself, adjusted its valuation to approximately $35 billion. This downward revision reflected growing concerns among stakeholders regarding the sustainability of the company's growth metrics and the financial implications of its AI strategy. The current layoffs are seen by analysts as a necessary step to align the company’s cost structure with its revised growth expectations. By reducing headcount and operational complexity, Canva aims to stabilize its financial position and prepare for future challenges in the competitive design software market.
Looking Ahead
The restructuring signals a new chapter for Canva, shifting from a phase of aggressive expansion to one of consolidation and efficiency. The company’s ability to navigate this transition will be critical in determining its long-term viability. As the tech industry grapples with the high costs of AI integration and slowing user growth, Canva’s actions may serve as a case study for other high-growth startups. The coming months will reveal whether the merged teams and reduced workforce can successfully reverse the growth slowdown and restore investor confidence. For now, the focus remains on executing the restructuring while maintaining the platform’s core value proposition for its vast user base.
Key takeaways
- Canva is cutting 1,271 jobs, representing 22% of its workforce, in its first layoffs since 2013.
- CEO Melanie Perkins cited the first growth slowdown in a decade and rising AI costs as key reasons.
- The restructuring includes merging major teams, flattening management, and reducing subspecialization.
- Canva revised its 2026 revenue growth forecast to 20%, down from 30%, earlier this year.
- Investors previously cut the company's valuation to $35 billion amid concerns over growth.
- Most hybrid workers must return to the office several days a week starting in January.
Sources
The WireByte editorial team synthesises technology news from multiple primary sources, verifies the facts, and links every source. Articles are produced with AI assistance and reviewed under our editorial policy.
