Canva layoffs: Tech giant to initiate cost cuts as ‘new technology’ slows growth

As the AI-driven layoffs hit tech companies, the graphic design platform Canva has also been caught in the storm. CEO Melanie Perkins on Wednesday announced the SaaS (software-as-a-service) company’s first-ever mass job cuts in thirteen years.

In the memo shared with the Canva team, Perkins said around 1,271 people, 22 per cent of the workforce, will be impacted by a major organisational overhaul. The restructuring includes role changes and relocation to centralised hubs. Though an exact number of job cuts has not been given, the CEO expressed her sadness in having to let go of a large part of the team.

“This is without doubt the hardest moment in our thirteen-year history. Behind every decision is someone we care deeply about, and I know the consequences will be very real for those directly affected, their families, friends and teammates,” she said.

Perkins said the company reached a point where incremental changes would not be enough.

The company’s annualised revenue fell short of internal targets of $5.2 billion, reaching only $3.69 billion. Though the company has 31 million paid users, according to Financial Review, the company has been experiencing a recent decline of roughly 12 million active users year-on-year.

Major early-stage investors, including Australia’s high-profile investors Airree Ventures and Blackbird Ventures, marked down the company to roughly $31 billion to $34.9 billion, down from a high valuation of $42 billion.

The company hinted at major cost-cutting, including relocating employees to key hubs like Sydney. Other hybrid employees are to work from home 4 to 5 days per week.

Perkins built on the financial sentiment in her note, mentioning that Canva’s growth had slowed for the first time in a decade. She highlighted this as the reason behind the Australian creative giant's changes in its operating model.

She also pointed to the direction of AI-led disruptions, adding a line about “new technology.”

“We've spoken a lot about how quickly the world is changing. New technology is transforming what people can create, how they create it, and what they expect from the products they use,” she said.

Severance package for sacked employees

Canva acknowledged the distress the decision can cause for affected employees and will support them throughout the process.

Employees will receive at least six months of salary and will receive twelve months of continued healthcare coverage. Workers will also get career support, interview preparation and one year of LinkedIn Premium. The company assured employees that it would proactively help them find new roles.

As a highlight, the company announced that every sacked worker will keep their Canva MacBook.