Canva Hits a Speed Bump After a Decade of Growth: 22% Workforce Cuts and Strategic Pivot

Canva is facing its first significant slowdown after ten years of sustained growth. To address this challenge, the Australian design giant has announced the elimination of 1,271 positions, representing 22% of its total workforce.

In a candid message to employees, Melanie Perkins, Canva’s co-founder and CEO, addressed the current situation with transparency. After reflecting on the company’s journey—from initial project pitches to becoming a platform adopted by hundreds of millions of users—she emphasized that success is never guaranteed. Perkins described the current year as the most difficult the company has ever faced.

Organizational Restructuring

Beyond the layoffs, Canva is undertaking a major internal reorganization. The Product, Growth, and Platform teams will be merged to facilitate better communication and break down silos between departments that previously operated independently. The company also plans to expand the responsibilities of remaining employees, granting them broader scopes of accountability. Additionally, Canva is introducing a new hybrid work model, requiring employees to be present in the office for several days each week.

The AI Challenge and Financial Adjustments

Canva’s most significant challenge now lies in artificial intelligence. To increase autonomy and reduce reliance on third-party models, the company is developing its own AI technologies. However, this strategy comes at a cost: a sharp increase in AI-related expenses has forced Canva to lower its revenue growth forecast from 30% to 20%.

This adjustment coincides with a further reduction in the company’s valuation by its early investors, now estimated at approximately $35 billion, following an initial decline earlier in the year.

Competitive Pressures from AI

AI poses a major competitive threat to Canva. While it enhances the company’s offerings, it also enables new players to enter its market. Tools like ChatGPT and Gemini can now quickly generate posters and presentations, encroaching on use cases that have traditionally been Canva’s core business. As a result, Canva’s primary competitive advantage is losing its distinctiveness.

A Paradigm Shift

For a company whose rapid expansion has long been a key strength, this restructuring marks a paradigm shift. Canva must now balance multiple demands: rationalizing expenses, supporting its AI ambitions, and solidifying its position against competitors who are expanding their offerings and ambitions.

A major question remains: will a more compact organizational structure lead to greater efficiency, or will it expose the company to new vulnerabilities? The evolution of Canva’s performance over the coming months will reveal the consequences of these changes and determine whether this reorganization is sufficient to reignite its growth.