Key takeaways
▶ Australian design software company Canva is restructuring, cutting 1,271 jobs—22% of its workforce.
▶ Co-founder and CEO Melanie Perkins said growth had slowed for the first time in 10 years and that the company would change how it operates.
▶ Rising costs to run AI features have also added pressure. Canva lowered its forecast for this year’s revenue growth from 30% to 20%, while early investors cut the company’s valuation to about $35 billion.
Australian design software company Canva is cutting 1,271 jobs, or 22% of its workforce. The company is undertaking a major restructuring as the cost of operating artificial intelligence (AI) features rises and growth slows.
In a memo to employees on Nov. 4 (local time), Canva co-founder and CEO Melanie Perkins said the company’s growth had slowed for the first time in 10 years.
“Over the past 13 years, we’ve turned the dream in a business plan into a platform used by hundreds of millions of people,” Perkins said. “But success in the first chapter does not guarantee success in the next.”
She added that this had been the most difficult year since the company was founded and stressed that Canva needed to reorganize to adapt to a changed business environment.
◆ Restructuring the way work is organized
According to the company’s announcement, Canva will combine its product, growth and platform teams as part of the restructuring. The move is intended to reduce the time and costs involved in communication across departments and speed up decision-making. The company also plans to streamline overly specialized roles so employees can take on a broader range of responsibilities.
Working arrangements will change as well. Canva plans to expand its hybrid model, combining remote work and office attendance, and will require employees to work from the office several days a week.
Perkins said the company had concluded that it could no longer maintain its existing organizational structure as it grew. Rather than continually increasing headcount to match the size of the business, Canva plans to simplify its organization and focus on improving collaboration.
◆ Competition from ChatGPT and Gemini as the design market shifts
Another challenge facing Canva is the spread of AI-powered design tools. Canva grew by making it easy for people without experience using professional design software to create posters, presentations and social media content from templates.
Recently, however, general-purpose AI services such as ChatGPT and Google Gemini have expanded their image-generation capabilities, giving users more tools for design work.
AI startup Gamma is also expanding its presentation and image-generation features, competing with Canva and Adobe.
Canva is developing its own AI models and enhancing related features, but it must also contend with the challenge of retaining existing users while covering the costs of technology investment and operations.
The restructuring shows that AI adoption presents software companies with new opportunities for growth as well as a financial burden.