Canva lays off 1,200 employees, CEO calls it hardest moment for company

Design giant Canva has joined a long list of companies that are laying off workers. On Tuesday, Canva CEO Melanie Perkins informed staff that the company was firing 1,271 employees via an internal memo. Perkins claimed that this was “without doubt the hardest moment” in Canva’s thirteen-year history.The restructuring follows what Perkins called Canva’s “hardest year yet” with growth slowing for the first time in a decade. The layoffs affect 22 per cent of Canva’s global workforce. The Australian startup is said to employ over 5,700 workers across 37 countries, including India. Though Canva has not mentioned which teams or regions are going to be affected by the layoffs.Why is Canva laying off workers?In the memo, Melanie Perkins mentioned that Canva needed to adapt to the changing market scenario. While she did not mention AI specifically, many have raised concerns over Canva’s business model as AI tools become popular for image generation and graphic design.“After exploring a wide range of alternatives, I’ve come to the difficult conclusion that small changes won’t be enough,” Perkins wrote. Going forward, she said, the company needed to set itself “up for the next decade.” As part of this decision, Canva also plans to combine major teams and reduce layers. “For some people, this will mean changes to their roles or being asked to relocate to centralised hubs,” Melanie Perkins added. “Sadly, it will also mean saying goodbye to teammates and friends who have helped build Canva into what it is today.”Canva’s severance package for laid off employeesEmployees leaving Canva will receive at least six months of salary, including statutory entitlements, regardless of location. The company will remove the one-year vesting cliff for employees who joined during the past year and provide 12 months of continued healthcare coverage in countries where it currently offers the benefit. The impacted employees will also receive 12 months of access to Canva Care, the company’s employee assistance programme, with coverage extended to family members. They will be offered one-to-one career coaching, interview preparation, and one year of LinkedIn Premium. They will also be invited to individual meetings with senior leaders.Canva will create an opt-in alumni talent directory to share with investors, partners and its wider industry network. Departing employees will also be allowed to keep their company MacBooks.The company is also launching the Canva Collective Fund, which will offer $10,000 grants to departing employees who want to start a business or undertake a project in their local community. Canva said it would not take ownership or equity in anything created with the grants. Employees have until 14 December to register their interest.Employees leaving the company will retain access to Slack and Gmail until the end of the week so that they can decide when and how to tell their teams. Canva has also cancelled non-critical meetings for the rest of the week and told employees they can take a day off without recording it as leave if they need time to process the announcement.The company will hold an all-hands meeting on 10 November to discuss the changes and answer questions.Canva to make Sydney its primary baseThe design giant is also changing the way it operates globally. As mentioned earlier, Canva has offices in multiple locations. But as the company focuses on combining teams, it is also planning to make Sydney its primary base of operations. Most hybrid employees are also expected to work from the office for about two to three days a week from January next year.“Working across countries has brought enormous benefits and talent, but it’s also made it harder to bring the right people together to solve complex problems,” Perkins said. Employees asked to relocate will be offered support.Canva had previously supported remote-first working arrangements. Employees were once asked to work from their nearest hub twice a quarter, though that requirement was later removed.The restructuring comes after Canva lowered its projected revenue growth for 2026 from 30 per cent to 20 per cent.Software companies as a whole are facing competition from AI tools while spending heavily to add AI features to their own products. Canva has reorganised its platform around AI under an initiative called Canva 2.0. It reportedly delayed the release of several products because of the cost of providing AI services to its largely non-paying users.The company later introduced Craft, its first foundation model, which it said would allow it to provide advanced AI services more efficiently than relying on models from OpenAI, Anthropic and Google. Canva is also giving third-party developers access to the model, which co-founder Cliff Obrecht said could provide a new source of revenue.Other tech companies, too, are laying off workers. In recent weeks, companies including SUSE, Squarespace, and Dropbox have had to cut jobs. While Microsoft has offered voluntary exit offers to 60,000 employees. Others, like Atlassian and Jack Dorsey’s Block have also laid off thousands of employees. As per layoff tracker, Layoffs.fyi, over 1,38,000 tech roles have been eliminated this year across 341 companies.- Ends