Canva is laying off 1,271 people, or 22% of its workforce, in the biggest restructuring in the design platform’s thirteen-year history. CEO and co-founder Melanie Perkins announced the cuts in an email to employees, calling it the company’s hardest moment ever and “our hardest year yet.”
The move comes at a difficult time for the Sydney-based company. Perkins said Canva’s growth “has slowed for the first time in a decade,” and that after exploring alternatives, she concluded that “small changes won’t be enough.” The 22% figure implies a workforce of roughly 5,800 people before the cuts.
Fewer layers, broader roles, more Sydney
Perkins framed the layoffs as part of an effort to “refound Canva” around small, empowered teams. The memo outlined three changes. The first is a single Product Org: Product, Growth and Platform will be merged into one organisation, with Perkins saying that improving one part of the product had increasingly meant navigating handovers between the three groups.
The second is fewer subspecialties and layers. Narrow subspecialties will be folded into broader roles so teams own goals from start to finish, and management layers will be simplified.
The third is co-location. Sydney will become the primary home for more product teams and some other functions, and some employees are being asked to relocate to centralised hubs. From January, most hybrid employees are expected to spend two to three days a week in the office.
Not everyone affected is losing their job. Perkins said some people will see their roles change or be asked to relocate. Canva has teams in 37 countries, so the timing of individual conversations will vary with local requirements.
What departing employees get
Canva has put together a fairly generous package. Everyone affected gets at least six months of salary, inclusive of statutory entitlements, regardless of location, and the one-year vesting cliff is being removed for those who joined in the past year. Departing employees also get twelve months of continued healthcare coverage where Canva currently offers it, and twelve months of Canva Care, its employee assistance programme, extended to family members.
On the career side, there is one-on-one coaching, interview preparation and a year of LinkedIn Premium, with a significant portion of the Talent Acquisition team helping with resumes and interviews. Canva will also share an opt-in alumni talent directory with investors and partners, and those leaving can keep their Canva MacBook.
How AI figures into this
Perkins’ memo doesn’t say AI is replacing the roles being cut. It points instead to organisational complexity, slowing growth and a world where “new technology is transforming what people can create.” But AI has been central to Canva’s recent moves. In April 2025, the company made what were reported as its first known redundancies, cutting 10 of its 12 technical writers just months after encouraging staff to adopt AI tools. In April this year, Canva launched Canva AI 2.0, which it described as its biggest product change since 2013. The release turns prompts into fully editable designs and campaigns, and works agentically across connected tools. It is powered in part by an in-house foundation model built by a dedicated AI organisation.
The rollout proved expensive. In August, Canva cut its 2026 revenue growth forecast from 30% to about 20%. Perkins told investors it was a “deliberate decision to get the economics right,” explaining that the company slowed distribution while it rebuilt its architecture and reduced unit costs. Reports on her shareholder letter said Canva had been relying too heavily on third-party frontier models. Demand wasn’t the problem: she said usage had far exceeded projections, and that Canva has cut the cost per AI task by nearly 90% since April even as users now generate roughly three times as many designs. Canva has since begun rolling out Canva AI 2.1, which Perkins described as the first version built on an economic model that supports its freemium strategy.
Canva isn’t alone in finding that AI at scale is expensive. Elon Musk recently acknowledged that the cost of serving the Grok bot is unsustainably high relative to revenue, and even the model makers are feeling it, with Anthropic swinging to a $567 million operating loss in Q3 as compute costs surged. For a company with hundreds of millions of monthly users, many of them on the free tier, the arithmetic is unforgiving.