Canva to lay off 1,271 employees:22% of staff affected; CEO says, ‘The most difficult time in our 13-year history’

Online design and publishing platform Canva has announced cuts of more than 22% of its workforce. The company’s decision will result in at least 1,271 employees losing their jobs, having their roles changed, or being relocated to central hubs. Artificial intelligence (AI) is driving this major change at the well-known Australian technology company. The most difficult period in Canva’s 13-year history In a note sent to employees, Canva Chief Executive Officer (CEO) Melanie Perkins said the Sydney-based company’s growth had slowed for the first time in a decade. She described the reorganisation as the most difficult period in the company’s 13-year history. Perkins wrote that new technology was changing the way people create and what they expect. She said she had reached the difficult decision that small changes would not be enough. Why did Canva announce layoffs and restructuring? Company to work in small groups, shift in hybrid culture Perkins said Canva would now have to become a simpler business and return to working with smaller teams. There will be fewer roles involving niche specialisations, or expertise in specific areas, at the company. Sydney will become the main base for the company’s product teams. From January, most hybrid employees will have to come into the office and work two to three days a week. IPO preparations and a fragile financial position Canva is preparing to list on the stock market through an initial public offering (IPO). At a time like this, the major reorganisation has left the company in a fragile financial position. Canva’s valuation reached a peak of $40 billion in 2021. However, it fell to around $26 billion during the sell-off in technology shares in 2022. Although its valuation later recovered, it is not yet clear how the recent turmoil will affect it. Melanie started Canva at the age of 19 In 2008, when Facebook was rapidly gaining popularity, 19-year-old Melanie Perkins felt that learning traditional design tools took years. She thought of making design software simple, online, and collaborative. It aimed to make it easier for people to design logos, posters, and business cards, allowing users to upload photos and customise designs using preset filters and fonts. Investors’ concern: Will AI generate returns? While the AI era has led to job losses on a massive scale, investors are now also asking when and how companies will see financial returns from their substantial investments in AI. What is ‘Software Cannibalisation’? When a new technology, such as AI tools like Claude, begins to eliminate the established business and demand of an existing company or software, it is referred to as ‘cannibalisation’ in the language of the tech industry. Companies such as Canva face the risk that people will complete their work directly using AI tools instead of using separate design tools.