Canva announces layoffs, job changes for about 22% of workforce

CANVA announced job cuts and a sweeping overhaul that will impact more than one-fifth of the workforce, as artificial intelligence forces a structural reckoning at one of Australia’s highest-profile technology companies.

Some 1,271 people, or 22 per cent of Canva’s staff, will lose their jobs, change roles or relocate to central hubs, chief executive officer Melanie Perkins said in a note to employees that was posted on the firm’s website on Wednesday (Nov 4).

The sweeping changes at Canva, an online design and publishing platform, mirror the broader upheaval across the software industry. Investors have wiped billions of dollars from the value of these firms amid concerns new technology like Anthropic PBC’s Claude will cannibalize their business.

Artificial intelligence is allowing people to do more on their own without specialty programmes, while companies are using AI to operate with fewer workers.

“New technology is transforming what people can create, how they create it, and what they expect from the products they use,” Perkins wrote in the note. “I’ve come to the difficult conclusion that small changes won’t be enough.”

Perkins, who co-founded Canva with Cliff Obrecht and Cameron Adams, didn’t specify how many staff would lose their jobs. But after the Sydney-based firm’s growth slowed for the first time in a decade, Perkins said Canva needs to become a simpler business and return to running small, empowered teams. There will be fewer niche specialisations, she said.

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She described the reorganisation as “the hardest moment in our 13-year history.”

Sydney will become the main base for more of Canva’s product teams. Perkins said more people will work face-to-face, and most hybrid staff will spend two to three days in the office a week from January.

Canva has been preparing for a potential listing, and the overhaul leaves the company in a delicate financial balance.

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After hitting a US$40 billion high in 2021, Canva’s valuation tumbled to roughly US$26 billion a year later during a broad tech selloff. While Canva’s dollar worth subsequently rebounded, the effect of more recent tumult is not yet clear.

While the AI era has led to widespread job losses, investors are also questioning when, or even if, the vast associated investments will deliver a financial dividend.

Firmus Grid last month scrapped a planned Australian initial public offering of up to US$5.5 billion, turning a rising star of the AI data centre boom into one of the biggest deal flops in recent memory.

Nextdc shares plummeted in October after the data centre operator said it was considering force majeure options and cut earnings guidance. BLOOMBERG