Canva Cuts 22% of Workforce as Valuation Slides on AI Costs

Canva will cut or reshape 22% of its workforce — 1,271 people — in the deepest restructuring of the Australian design platform's thirteen-year history.

Co-founder and CEO Melanie Perkins called the move "without doubt the hardest moment in our thirteen-year history" and confirmed the affected staff would either lose their jobs, be asked to relocate, or be moved into different roles. That works out to roughly one in five of the company's employees, a proportion that turns a routine reorganisation into a structural retreat.

Perkins framed the decision against a decade of uninterrupted expansion that has now stalled. "Our hardest year yet, and as we shared earlier this year, our growth has slowed for the first time in a decade," she wrote to staff. A caveat sits inside that sentence: Canva is not shrinking, but the growth engine that justified a A$60bn ($41.8bn; £31.1bn) valuation has stopped firing.

What exactly is changing?

The restructuring cuts along three lines, according to Perkins' Wednesday note to staff:

• 1,271 employees across Canva's operations face job losses, forced relocations or role changes.
• Sydney will become the "primary home" for more of the company's product teams, pulling engineering and product work toward its Australian headquarters.
• From next year, hybrid workers must spend two to three days per week in the office — a reversal of the remote-first flexibility that helped Canva hire across 37 countries.

"For some people, this will mean changes to their roles or being asked to relocate to centralised hubs. Sadly, it will also mean saying goodbye to teammates and friends who have helped build Canva into what it is today," Perkins wrote. The tone is contrite; the mechanics are consolidation. In plain terms, Canva is centralising where its people sit and shrinking how many of them there are.

Why is the valuation falling?

Two of Canva's own backers have marked down the company. Blackbird Ventures and Airtree, both early investors, reportedly cut their valuation from A$60bn at the end of last year to about A$49bn — a reduction of roughly A$11bn, or around 18%, in under twelve months.

Canva itself has also reportedly lowered its internal valuation. The stated pressure point is artificial intelligence: the cost of building AI features into its platform is rising sharply, while investors simultaneously worry that the same technology threatens Canva's core business. The company is paying to defend itself against the very force that is eroding its premium.

Perkins acknowledged the shift without quantifying it. "New technology is transforming what people can create, how they create it, and what they expect from the products they use," she said in her note. What she did not say is how much of the 22% cut is driven by AI costs versus slower sales — the company has not broken that down.

Who is Melanie Perkins?

Perkins left university at 19 to found her first venture and launched Canva in 2013. The company built its business on a simple proposition: templates and tools that let people without design training produce professional-looking graphics — from wedding invitations to business pitch decks.

That ease-of-use franchise is precisely what generic AI tools now threaten to replicate. Canva's answer has been to roll out its own AI products, and the expense of that rollout is one of the reported reasons behind the internal valuation cut.

What happens next?

The relocation to Sydney hubs and the two-to-three-day office mandate take effect from next year, meaning the full human and cost impact will land in Canva's following financial reports. The open question is whether AI product spending converts into renewed growth before investor patience — already discounted by A$11bn — erodes further.