Canva to lay off, relocate 22% of staff in overhaul

Canva will lay off, reassign or relocate 1,271 employees, or 22% of its workforce, co-founder and CEO Melanie Perkins announced on Wednesday, Sydney time. She called it "without doubt the hardest moment in our thirteen-year history". The Australian design company is overhauling its structure after its growth slowed for the first time in a decade. Investors have also marked down its valuation this year over concerns about artificial intelligence.bbc.co.uk

Perkins did not say how many of the affected staff will lose their jobs. "For some people, this will mean changes to their roles or being asked to relocate to centralised hubs," she wrote. "Sadly, it will also mean saying goodbye to teammates and friends who have helped build Canva into what it is today".theverge.com+1

Refounding the company

"After exploring a wide range of alternatives, I've come to the difficult conclusion that small changes won't be enough," Perkins said. She described the plan as an effort to "refound Canva" around small, empowered teams. Canva will combine its Product, Growth and Platform teams into one product organization and simplify management layers. Sydney will become the "primary home" for more of its product teams. The company is also ending its remote-first approach. From January, most hybrid employees will be expected in the office two to three days a week.forbes.com.au+2

Departing staff will get at least six months' salary, a year of healthcare coverage, their company MacBooks and career support. A new Canva Collective Fund will offer grants of up to US$10,000 to former employees who want to start a business.forbes.com.au

Valuation under pressure

Canva started 2026 valued at US$40 billion and was seen as a leading IPO candidate. Then it delayed several AI products because they were costly to provide to its mostly non-paying users, and it cut its revenue growth forecast from 30% to 20%. Investors Blackbird and Airtree cut their valuations of the company from A$60 billion to about A$49 billion. SEC filings show T. Rowe Price marked its Canva shares down 20%, which implies a valuation of US$30.4 billion as of August 31.bbc.co.uk+1

Canva's memo does not mention AI directly. It says only that "new technology is transforming what people can create". Last month the company introduced Craft, its own foundation model, which it hopes will lower its AI costs.forbes.com.au+1

Industry-wide cuts

The layoffs come as cuts spread across the software industry. Atlassian ↘ 0.61% cut 1,600 jobs in February, and Block ↗ 15.30% cut 4,000 in April. Squarespace announced layoffs affecting 19% of its staff one day before Canva. Blackbird, Canva's largest shareholder, backed the move. "Decisions like this are never easy, but we back Canva's decision to make the changes needed to set the company up for its next chapter," a spokesperson said.theverge.com+1