Canva Cuts 1,271 Jobs as Growth Slows and AI Costs Climb

Canva is cutting 22% of its staff — 1,271 people — as the design software maker confronts its first growth slowdown in a decade and the rising cost of artificial intelligence.

Co-founder and CEO Melanie Perkins announced the layoffs in a note to employees. She said the company has scaled successfully so far but must now change to address slowing growth.

What did Melanie Perkins tell employees?

Perkins framed the cuts against the company's thirteen-year arc from startup pitch to a platform used by hundreds of millions of people. Her note, quoted in full by the company, carried a blunt admission.

"Over the past thirteen years, we've turned a dream in a pitch deck into a platform used by hundreds of millions of people. None of it would have been possible without the talent, imagination, and care of every single person who has been part of this journey. Yet success in our first chapter doesn't guarantee success in the next. 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," Perkins wrote.

How is Canva restructuring?

The layoffs come with a broad reorganization of the company's structure. Canva is merging its product, growth and platform teams to reduce what the company calls communication friction between units.

The company is also reducing what it terms "subspecialisation." In practice, that means remaining employees may be asked to take on broader responsibilities across functions.

A third change touches where people work. Canva is moving toward hybrid work and asking staff to come into an office a few days each week.

Why are AI costs forcing the cuts?

The restructuring has a financial driver. Canva has been shipping its own AI models to cut costs and reduce its reliance on third-party models. That effort was not enough to absorb the expense.

The company cut its revenue growth forecast to 20% from 30% to address ballooning AI costs. The downgrade had a knock-on effect: Canva's early investors marked down its valuation to about $35 billion earlier this year.

That figure still places Canva among the most valuable private software companies, but the write-down signals that investors see slower expansion ahead, not just a temporary dip in demand.

Who is competing with Canva?

Canva faces pressure on two fronts. AI startups are attacking its market directly. General-purpose chatbots such as ChatGPT and Gemini now offer image generation capabilities that let people assemble posters and presentations without a dedicated design tool.

That dynamic matters for a company whose core product is exactly that kind of accessible design. When a chatbot can produce a passable poster in seconds, Canva's template library loses some of its pull for casual users.

What happens next?

The merged teams, broader roles and hybrid work mandate take effect as Canva absorbs the cost of building its own AI stack. The company is betting that in-house models will lower its dependence on external providers over time.

The bet comes at a steep price: 1,271 jobs, a valuation reset to roughly $35 billion, and a growth target trimmed by ten percentage points. Whether the leaner structure restores Canva's growth curve will define its second chapter.