Australian design software company Canva is laying off 1,271 employees, representing around 22% of its workforce, as the company faces slower revenue growth, rising artificial intelligence (AI) costs and increasing competition from technology firms. Co-founder and CEO Melanie Perkins announced the decision in a note to employees, describing the current period as a difficult phase for the business.
Job cuts form part of a wider organisational restructuring aimed at changing how different teams work together. Canva plans to merge its product, growth and platform teams to reduce communication gaps and simplify internal operations.
Company is also reducing what it describes as "subspecialisation", a move that could require employees to handle a wider range of responsibilities rather than working within narrowly defined roles. Alongside these changes, Canva is moving towards a hybrid working arrangement, asking employees to work from an office for a few days each week.
Canva Changes Structure
The restructuring comes as Canva reassesses its business priorities following a slowdown in growth. The company had maintained strong expansion over the past decade, but its latest outlook indicates that maintaining the same pace has become more difficult.
In her note to employees, Perkins acknowledged the change in business performance and the challenges facing the company. "Yet success in our first chapter doesn’t guarantee success in the next. This has been our hardest year yet, and as we shared earlier this year, our growth has slowed for the first time in a decade," she wrote.
The decision to combine multiple teams is intended to create a simpler organisational structure. By bringing product development, growth and platform operations closer together, Canva aims to reduce internal coordination requirements and improve the way it develops and delivers products.
AI Costs Pressure
Canva has been investing in its own AI models to reduce development expenses and dependence on technology developed by external providers. The company has been adding AI-based features to its design platform as demand for automated image creation, content generation and presentation tools increases.
However, these investments have also added to its operating costs. Canva has reportedly reduced its revenue growth forecast to 20% from an earlier projection of 30%, reflecting the financial pressure associated with its AI-related spending and slower business expansion.
The company is attempting to balance investment in new technology with the need to maintain financial efficiency. Developing and operating AI models requires significant computing resources, infrastructure and technical expertise, making cost management an important part of its business strategy.
Earlier this year, early investors also reduced Canva valuation to around $35 billion. The revised valuation reflects changes in investor expectations amid slower growth and increasing competition in the technology sector.
AI Rivals Challenge Canva
Canva is also facing competition from AI startups and larger technology companies offering tools that can create images, posters and presentations through simple text instructions.
General-purpose AI platforms such as ChatGPT and Gemini have expanded their image-generation capabilities, allowing users to create visual content without relying entirely on traditional design software.
These developments are changing the competitive landscape for online design platforms. Users can increasingly generate graphics and other visual material through conversational tools, creating additional competition for businesses that depend on subscriptions to design software.
For Canva, the challenge is to retain its existing users while developing features that justify continued use of its platform. Its investment in proprietary AI models is part of this response, although the company still needs to manage the costs involved in building and maintaining these technologies.
What is Canva
Founded in 2013 by Melanie Perkins, Cliff Obrecht and Cameron Adams, Canva is an Australian technology company headquartered in Sydney. It operates an online graphic design platform that allows individuals, businesses and organisations to create presentations, social media graphics, posters, documents, videos and other visual content.
Canva follows a freemium business model, offering basic design tools at no cost while generating revenue through paid subscriptions and business-focused services. Its paid offerings include Canva Pro and Canva Teams, which provide additional design features, content resources and collaboration tools. The company has also expanded its platform through AI-powered design and content creation features.
The latest layoffs mark a significant organisational change for Canva as it adjusts to a more competitive market. The company now faces the task of managing operating costs, maintaining revenue growth and competing with AI-based platforms that are changing how people create and edit visual content.
