Canva cuts 22% of staff as growth stalls and AI competition intensifies

Key points

• Canva is restructuring its operations, impacting 1,271 employees or 22% of its workforce, due to slowing growth and increased competition from artificial intelligence tools.
• CEO Melanie Perkins announced the changes on Tuesday, describing it as the company's most difficult moment in 13 years.
• The overhaul includes layoffs, role changes, and relocations to Sydney, with hybrid workers required to spend two to three days in the office starting in January.
• Departing employees will receive six months' salary, 12 months of healthcare, and career support.

Background

Canva had previously lowered its 2026 revenue growth forecast from 30% to 20% in August. The company's valuation dropped from A$60bn to A$49bn earlier this year, partly due to concerns about AI's impact on its business. This restructuring follows a period of slowed growth for the first time in a decade.

How outlets are covering it

Fox Business emphasized the scale of the restructuring and the impact on 22% of the workforce, while BBC highlighted the drop in Canva's valuation and the impact of AI on its business. Business Insider provided the full text of CEO Melanie Perkins' memo, detailing the reasons for the restructuring and the support being offered to departing employees. All three sources agreed on the number of employees affected and the reasons for the restructuring, but differed in their emphasis on the impact of AI and the company's valuation.

Why it matters

This restructuring reflects the broader impact of AI on the tech industry, as companies adapt to new technologies and changing consumer expectations. It also highlights the challenges faced by startups in maintaining growth and competitiveness in a rapidly evolving market.

What to watch

Canva will provide more details about the restructuring and its future plans during a company-wide meeting scheduled for Nov. 10. The company will also continue to support departing employees through career coaching, interview preparation, and other job-search assistance.