Canva lays off 1,271 people, 22% of staff, as growth slows for the first time in a decade

Canva cuts 22% of staff as its decade-long growth run ends

Canva is laying off 1,271 employees, roughly 22% of its workforce, in response to a slowdown that marks the first time in ten years the company's growth has decelerated. According to TechCrunch, co-founder and CEO Melanie Perkins announced the cuts in a note to staff on November 4, describing this as the company's most difficult year so far.

Perkins told employees that Canva had grown over thirteen years from an idea in a pitch deck into a platform used by hundreds of millions of people, but cautioned that past success does not guarantee future performance. Her message, as relayed by TechCrunch, was that growth has slowed for the first time in a decade and the organization needs to change accordingly.

A flatter structure and broader roles

The layoffs arrive alongside a substantial internal reorganization. TechCrunch reports that Canva is merging its product, growth and platform teams into a combined structure intended to cut down on the communication overhead that builds up between specialized groups. The company is also rolling back what it calls subspecialisation, meaning the remaining employees will be expected to take on wider remits rather than narrow ones.

A further change affects where people work. Canva is shifting to a hybrid model and will ask staff to spend several days a week in an office, a notable stance at a moment when return-to-office mandates remain contentious across the tech industry.

AI is both a cost problem and a competitive threat

Underlying the restructuring is pressure from two directions. On the cost side, Canva has been building its own AI models to lower spending on and dependence on third-party providers. Even so, according to TechCrunch, those expenses grew large enough that the company cut its revenue growth forecast from 30% to 20%. That revision prompted early investors to mark down Canva's valuation to roughly $35 billion earlier this year.

On the demand side, Canva faces mounting competition from AI startups and from general-purpose chatbots such as ChatGPT and Gemini, whose image-generation features can produce posters and presentations that once required a dedicated design tool. For casual users, the gap between prompting a chatbot and opening a design editor has narrowed considerably.

Why it matters

A 22% workforce reduction at one of the most widely used consumer software platforms is a strong signal that the design software category is losing momentum. Canva built its business on making design accessible to non-designers, and generative AI chatbots now offer a similar promise with even less friction.

The episode also illustrates the double bind that AI has created for established software companies: the technology raises operating costs when embedded in a product at scale, while simultaneously giving users an alternative way to complete the same tasks. Canva's response — team consolidation, broader individual roles, in-house models and a hybrid work mandate — will be watched closely by other SaaS firms facing the same squeeze.

How Canva performs after this reset, and whether a leaner structure plus proprietary AI models can restore its earlier growth trajectory, will say a great deal about the durability of design tooling in a world where a chatbot can draft a slide deck in seconds.