Canva cuts 1,271 staff as growth slows and AI costs rise
Canva is eliminating 22% of its workforce to address its first growth slowdown in a decade and manage rising artificial intelligence expenses. The restructuring includes merging teams and reducing reliance on third-party models.
Design software company Canva is cutting 1,271 employees, representing 22% of its staff, in response to a significant slowdown in growth. Co-founder and CEO Melanie Perkins stated that the company needs to change to address this shift, noting that growth has slowed for the first time in a decade. Perkins described the current period as the company's hardest year yet.
To reduce communication friction and lower costs, Canva is merging its product, growth, and platform teams. The company is also reducing subspecialization, which may require remaining employees to take on broader responsibilities, and is moving toward a hybrid work model. Financially, Canva cut its revenue growth forecast from 30% to 20% to address ballooning AI costs. This adjustment contributed to early investors reducing the company's valuation to approximately $35 billion earlier this year.
The company is shipping its own AI models to decrease reliance on third-party providers. However, it faces intensifying competition from general-purpose chatbots like ChatGPT and Gemini, whose image generation capabilities allow users to easily create posters and presentations. Canva argues that these organizational and cost management measures are necessary to navigate its current market position.