Canva, the popular online graphic design platform, is preparing to cut 1,271 jobs, representing around 22% of its total workforce. The decision comes as the company faces slower business growth, rising artificial intelligence costs, and increasing competition from AI-powered design tools.
Canva co-founder and CEO Melanie Perkins shared the decision with employees in an internal message. She explained that although the company has achieved significant success over the past 13 years, it now needs to make major organizational changes to prepare for its next phase.
Canva Faces Its First Major Growth Slowdown
Canva has grown into one of the world’s most widely used design platforms, serving hundreds of millions of users. However, the company is now experiencing a slowdown in growth for the first time in nearly a decade.
In her message to employees, Perkins acknowledged the difficult situation and said the company’s previous success does not automatically guarantee future growth.
She also highlighted the contributions of employees who helped transform Canva from an early business idea into a global design platform.
The latest layoffs reflect the challenges Canva is facing as it adjusts its business strategy to changing market conditions.
Company Plans Major Organizational Changes
Along with reducing its workforce, Canva is planning to restructure several internal teams to improve efficiency and speed up decision-making.
The company intends to bring its product, growth, and platform teams closer together. The aim is to reduce communication gaps and make collaboration between different departments easier.
Canva also plans to reduce the level of specialization across certain roles. This could mean employees will be expected to handle a wider range of responsibilities instead of focusing on narrowly defined tasks.
Another change involves its workplace policy. Canva is moving toward a hybrid working model, which will require employees to spend some days working from the office.
Rising AI Costs Put Pressure on Revenue Growth
Artificial intelligence is becoming an important part of Canva’s product strategy. The company has been developing its own AI models to reduce its dependence on third-party technology providers and manage operating costs.
However, building and running AI systems requires significant investment in computing infrastructure and resources.
Earlier this year, Canva reportedly reduced its revenue growth forecast from 30% to 20%, partly because of increasing AI-related expenses.
The financial pressure has also affected investor confidence. Early investors reportedly reduced Canva’s valuation to approximately $35 billion, representing a significant decline from its earlier valuation.
AI Startups and Chatbots Increase Competition
Canva is also dealing with growing competition in the design software market.
AI-focused startups such as Gamma are introducing tools that allow users to generate presentations, images, and other visual content with simple text prompts.
At the same time, general-purpose AI platforms such as ChatGPT and Google Gemini are expanding their image-generation capabilities. These tools make it easier for users to create posters, presentations, and marketing materials without relying entirely on traditional design software.
This changing competitive landscape could put additional pressure on established platforms like Canva to improve their AI features and offer more value to users.
What This Means for Canva’s Future
Canva’s decision to reduce its workforce highlights the challenges facing technology companies as they invest heavily in artificial intelligence while trying to maintain sustainable business growth.
The company is attempting to simplify its organizational structure, control costs, and strengthen its position in an increasingly competitive market.
However, the coming months will be important in determining whether these changes help Canva return to stronger growth.
For the broader technology industry, Canva’s layoffs are another example of how the AI revolution is changing not only products and services but also the way technology companies operate and manage their workforce.
Conclusion
Canva’s decision to lay off 1,271 employees comes at a time when the company is facing slower growth, rising AI expenses, and stronger competition. While the company continues to invest in artificial intelligence, it now needs to balance innovation with financial efficiency. Its next phase will depend on how successfully it adapts to the rapidly changing AI-powered design industry.