Design software giant Canva is laying off 22% of its workforce, impacting 1,271 employees, as the company grapples with its first major growth slowdown in a decade, ballooning operational expenses, and intensifying competition within the artificial intelligence sector.
The sweeping cuts were announced by co-founder and CEO Melanie Perkins in a candid memo sent to employees, marking a sobering milestone for a company that spent the last thirteen years evolving from a fledgling pitch deck concept into a dominant global design platform utilized by hundreds of millions of people worldwide. Perkins acknowledged the painful reality of the decision, noting that while the company has achieved extraordinary scale, it must fundamentally restructure its operations to navigate a more challenging economic and technological landscape.
"Over the past thirteen years, we’ve turned a dream in a pitch deck into a platform used by hundreds of millions of people," Perkins wrote in her message to staff. "None of it would have been possible without the talent, imagination, and care of every single person who has been part of this journey. 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."
The workforce reduction represents one of the most significant contractions in the tech sector for the period, highlighting the pressures facing even highly successful private software companies as they adjust to shifting market dynamics.
Alongside the massive layoffs, Canva is undertaking a profound organizational reshuffle designed to dismantle internal silos and streamline operations. The company is actively merging its product, growth, and platform teams into cohesive units intended to reduce communication friction and speed up decision-making processes. Furthermore, Canva is scaling back what Perkins termed "subspecialisation," a move that will likely require remaining employees to broaden their skill sets and take on a wider array of cross-functional responsibilities. In tandem with these structural changes, the company is shifting away from its fully flexible remote policies, moving toward a hybrid work model that mandates employees return to physical offices several days a week.
The strategic pivot comes on the heels of a particularly turbulent year marked by financial adjustments and soaring infrastructure expenditures. Canva has poured substantial resources into developing and shipping its own proprietary AI models in an effort to reduce reliance on expensive third-party technologies and manage operational overhead. Despite these internal innovations, the company was forced to lower its revenue growth forecast from 30% down to 20%, primarily driven by the heavy financial burden of hosting and scaling advanced AI workloads.
The revised financial outlook and broader market headwinds prompted Canva’s early investors to reevaluate the company’s worth, slashing its private valuation down to approximately $35 billion earlier in the year.
At the same time, the competitive landscape for digital design and content creation has shifted dramatically. Canva faces mounting pressure from a new wave of specialized AI startups that are rapidly releasing creative tools designed to rival traditional graphic design platforms. Simultaneously, the proliferation of general-purpose conversational chatbots, including OpenAI’s ChatGPT and Google’s Gemini, has democratized advanced content generation. With these conversational tools offering sophisticated image generation and layout capabilities, everyday users can now effortlessly assemble posters, presentations, and marketing materials without needing dedicated design software.
As Canva enters this difficult new chapter, leadership is banking on the leaner organizational structure, proprietary technology investments, and a renewed strategic focus to help the company weather the current downturn and adapt to an increasingly AI-driven market.
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