Canva said 1,271 employees will be affected by a restructuring, equal to about 22% of the company’s workforce, but it did not disclose how many people will ultimately lose their jobs.
In a public memo to staff, CEO Melanie Perkins said the group of affected employees includes people who will be laid off, people who will move into different roles, and people who will be asked to relocate to major hubs such as Sydney.
Memo cites slower growth and new technology, without naming AI
Perkins wrote that Canva is going through its toughest year so far and said the company’s growth has slowed for the first time in a decade. She also said new technology is changing what people can create, how they create it, and what they expect from the products they use.
The memo did not explicitly mention AI. That detail drew attention because Canva had already slowed the rollout of some AI features in August after saying the cost of those tools was higher than expected, and it cut its revenue growth forecast for the year from 30% to 20%.
Perkins said the company had explored a range of alternatives before deciding that smaller adjustments would not be enough.
AI feature costs had already pressured guidance
Fortune reported in August that Canva lowered its revenue outlook because AI features were costing more than expected. Perkins said at the time that demand for the company’s new AI tools had far exceeded internal expectations, making it clear that Canva first needed to reduce the cost of each AI task before it could support a broader rollout.
She said that since Canva AI 2.0 launched in April, the cost of each AI task had fallen by nearly 90%. At the same time, the number of designs users created with Canva AI was three times higher than with the previous version. She did not provide a figure for the total cost impact.
Fortune also cited PitchBook analyst Derek Hernandez, who said AI is changing software-as-a-service economics by ending the assumption of zero marginal cost. He described Canva and Figma as major signals of that shift.
Figma disclosed that its free cash flow margin fell from 27% in the first quarter to 14% in the second quarter. Its projected third-quarter revenue growth was 36%, down from 48% in the second quarter.
Internal figures reportedly showed flat annualized revenue
Founded in Australia in 2013, Canva built its business around tools that let people without formal design training create presentations, social media graphics, and marketing materials.
Co-founder and Chief Operating Officer Cliff Obrecht said in an interview in February that by 2025 Canva had more than 265 million monthly active users, more than 31 million paying users, and annualized recurring revenue of $4 billion by year-end.
The Australian Financial Review later reported, citing internal confidential figures, that Canva’s annualized revenue at the end of October was roughly flat compared with the start of the year. The report also said monthly active users were down by about 12 million from a year earlier.
Canva plans to merge teams, cut layers, and shift office expectations
Perkins said Canva now needs to “refound” itself and return to smaller teams with more autonomy, where teams can make decisions, own outcomes, and focus on what matters most to users.
The memo listed three specific changes:
- First, Canva will merge its Product, Growth, and Platform divisions into a single product organization. The memo said product improvements had too often required handoffs and coordination across all three groups.
- Second, the company will fold narrowly defined specialties into broader roles, reduce management layers, and combine overlapping responsibilities.
- Third, closely connected teams will work together in the same locations more often. Sydney will become the main hub for more product teams, and from January next year, most hybrid employees will be expected to work in the office about two to three days a week.
The memo also said Canva decided first what structure, skills, and locations the company needs, and only then reviewed individual roles.
Exit package includes at least six months of pay and a $10,000 founder grant
For employees leaving the company, Canva said it will provide at least six months of pay in every country, including statutory severance where applicable.
Employees who joined within the past year will no longer need to wait a full year to receive their first equity vesting milestone. In countries where Canva already provides health insurance, coverage will continue for 12 months. The company will also offer a 12-month employee assistance program that extends to family members.
Additional support includes career coaching, interview preparation, one year of LinkedIn Premium, and access to an alumni talent directory. Departing employees will also be allowed to keep their company-issued MacBook.
Employees who want to start their own businesses can apply to a newly created Canva Collective Fund for a $10,000 grant per person. Applications are open until Dec. 14, and Canva said it will not take any equity.
