Canva is undertaking its first mass layoff as part of a restructuring that could affect 1,271 employees, or 22% of its workforce, after slowing growth and higher-than-expected artificial-intelligence costs prompted the Australian design-software company to reassess its operations.
Co-founder and Chief Executive Melanie Perkins told employees that the changes would include job losses, revised responsibilities and requests to relocate. The affected-worker figure therefore does not represent 1,271 confirmed dismissals.
"This is without doubt the hardest moment in our thirteen-year history," Perkins wrote in a staff message.
The company plans to consolidate teams, broaden some specialised roles and make Sydney the primary location for more product teams. Hybrid employees will be expected to work from an office two to three days a week beginning in January.
"For some people, this will mean changes to their roles or being asked to relocate to centralised hubs," Perkins said. "Sadly, it will also mean saying goodbye to teammates and friends who have helped build Canva into what it is today."
The announcement follows a deterioration in Canva's growth outlook. In August, it lowered its revenue-growth forecast from 30% to 20%, compared with 38% growth in the previous financial year.
Later that month, Canva reduced its internal valuation by $7.9 billion, from $38.9 billion to $31 billion. Two investors separately marked their valuation of the business down by 17%, from $42 billion to $34.9 billion.
Canva has identified AI implementation costs as a significant factor behind its reduced projections. Perkins told investors in August that demand for the products was strong, but developing and deploying them had cost more and taken longer than expected.
The company launched Canva AI 2.0 in April, allowing users to generate designs through conversational text prompts. Perkins said its cost per AI task had subsequently fallen by 90%, although the savings did not prevent the reduction in its growth forecast.
"This has been our hardest year yet, and as we shared earlier this year, our growth has slowed for the first time in a decade," she told staff.
Founded in 2013, Canva has expanded across 37 countries and has claimed more than 265 million monthly active users. Its browser-based platform serves businesses, schools and individuals creating presentations, documents and other visual material.
Perkins said the restructuring began with an assessment of Canva's goals and the organisational structure, skills and locations required to achieve them, before managers considered individual positions.
Employees losing their jobs will receive at least six months' salary and retain their work MacBooks. Canva is also waiving the one-year vesting cliff for newer employees and offering 12 months of employee-assistance access and healthcare coverage where applicable.
Job-search support includes individual coaching and a year of LinkedIn Premium. Departing employees who want to start businesses can apply to the new Canva Collective Fund for $10,000 grants.
Applications close December 14, and Canva will take no ownership stake in funded ventures, Perkins said.
The announcement comes alongside workforce changes at Microsoft and preparations for further reductions at Disney. Microsoft's voluntary exit programme covers about 60,000 eligible employees, though eligibility does not establish how many will leave.
Canva gave employees the announcement day off and scheduled an all-hands meeting for November 10 to provide further details.
