Canva to Lay Off 1,271 Employees: 22% of Staff Affected; CEO Calls It the Toughest Period in 13 Years
Online design and publishing platform Canva has announced a reduction of more than 22% of its workforce. This decision will result in at least 1,271 employees either losing their jobs, seeing their roles changed, or being relocated to central hubs.
This major shift at the prominent Australian tech company is being driven by the rise of artificial intelligence (AI).
The Toughest Period in 13 Years
In a note to employees, Canva’s Chief Executive Officer (CEO) Melanie Perkins stated that the growth of the Sydney-based company has slowed for the first time in a decade. She described this reorganization as the most difficult period in the company’s 13-year history.
Perkins wrote that new technology is transforming how people create and what they expect. “I have reached the conclusion—through these difficult decisions—that minor adjustments will not be enough.”
Why the Layoffs and Restructuring at Canva?
Impact of New AI Technology: The emergence of AI tools, such as Anthropic’s ‘Claude,’ now allows individuals to complete tasks independently without needing specialized software or training.
Reduced Need for Staff: Companies are increasingly leveraging AI to operate with smaller teams.
Concerns Over Declining Valuation: Investors fear that new technologies could disrupt existing business models, contributing to a multi-billion dollar drop in the valuation of the software industry.
Shift Toward Smaller Teams and a Hybrid Culture
Perkins explained that Canva must now simplify its business structure and return to working in smaller teams. The company will reduce roles focused on niche specializations—positions requiring highly specific, narrow expertise. Additionally, Sydney will serve as the primary base for the company’s product teams. Starting in January, most hybrid employees will be required to work from the office two to three days a week.
Preparing for an IPO Amid a Delicate Financial Situation
Canva is preparing for an initial public offering (IPO). In this context, this major reorganization has left the company in a delicate financial position. In 2021, Canva’s valuation reached a peak of $40 billion.
However, during the sell-off of tech stocks in 2022, this valuation fell to approximately $26 billion. While it has since recovered, it remains unclear how the recent upheaval will impact the company.
Melanie Started Canva at the Age of 19
In 2008, as Facebook was rapidly gaining popularity, 19-year-old Melanie Perkins realized that traditional design tools took years to master. She envisioned a design platform that would be simple, online, and collaborative.
Fusion Books: Melanie, along with Cliff Obrecht, launched her first platform.
The Birth of Canva (2013): In 2013, Cameron Adams joined the team, and together, the three launched ‘Canva.’
The goal was to make it easier for people to design logos, posters, and business cards, allowing users to upload photos and customize their designs using preset filters and fonts.
Investor Concerns: Will AI Yield Returns?
While the rise of AI has led to widespread job losses, investors are now questioning when and how companies will generate financial returns from the massive investments being poured into AI.
What is ‘Software Cannibalization’? When a new technology—such as an AI tool like Claude—begins to erode the established business and demand for an existing company or software, it is referred to in the tech industry as ‘cannibalization.’
Companies like Canva face the risk that users might bypass dedicated design tools altogether, opting instead to complete their tasks directly using AI tools.
