Canva cuts 22% of staff in 'hardest year' amid AI competition and slowed growth

Key points

• Canva is cutting or relocating 1,271 employees, representing 22% of its global workforce.
• CEO Melanie Perkins described the restructure as the 'hardest moment' in the company's 13-year history.
• The company is centralizing product teams in Sydney and requiring hybrid workers to spend two to three days in the office weekly.
• Departing employees will receive at least six months' salary, 12 months of healthcare coverage, and US$10,000 grants for new ventures.
• Canva's valuation dropped from A$60bn to A$49bn earlier this year, partly due to AI concerns.

Background

Canva, one of Australia's most prominent tech startups, has previously been considered for a Nasdaq listing. The company had experienced steady growth for a decade until recently. This restructure follows a broader trend in the tech sector, where companies like Atlassian and Block have also announced significant layoffs due to AI competition and economic pressures.

How outlets are covering it

BBC and The Guardian both report on the 22% workforce reduction and Perkins' internal email. However, The Guardian emphasizes the broader tech sector trend, noting that Canva did not explicitly mention AI in its announcement, unlike competitors such as Atlassian. BBC highlights the valuation drop from A$60bn to A$49bn, while The Guardian focuses on the severance packages and the 'SaaS-pocalypse' debate.

Why it matters

The restructure signals a shift in the tech industry as companies adapt to AI competition and slowing growth. Canva's move to centralize operations and reduce costs may impact its global presence and innovation pace. The layoffs also reflect broader economic pressures on tech startups and established firms alike.

What to watch

Canva will continue to consolidate teams in Sydney and implement new hybrid work policies. The company will monitor the impact of the restructure on its growth and competitiveness. Departing employees will receive severance packages and support for new ventures. The tech sector will likely see further adjustments as companies navigate AI integration and market challenges.