Canva is laying off 1,271 employees, representing 22% of its workforce, as the design software maker grapples with slowing growth for the first time in a decade.
Co-founder and CEO Melanie Perkins announced the cuts in a note to staff. "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.
The company is restructuring by merging its product, growth, and platform teams to reduce communication friction and decreasing what it calls "subspecialisation" so employees take on broader responsibilities. Canva is also shifting to hybrid work, requiring staff to work from an office several days a week.
Canva has been building its own AI models to cut costs and reduce reliance on third-party services. Despite this effort, the company lowered its revenue growth forecast to 20% from 30% due to rising AI expenses. Early investors marked down Canva's valuation to about $35 billion earlier this year.
The company faces mounting competition from AI startups and general-purpose chatbots like ChatGPT and Gemini, which offer image generation capabilities that let users quickly create posters and presentations.