Canva announces major job cuts after 'our hardest year yet'

Canva, a prominent Australian startup, has announced significant workforce reductions as it navigates its most challenging year yet. Co-founder and CEO Melanie Perkins disclosed that 1,271 employees, constituting 22% of the company's workforce, will be affected by job cuts, relocations, or role changes. In a note to staff, Perkins acknowledged that this decision marked a "incredibly hard decision" and resulted in "significant changes" for the company.

The recent job cuts are attributed to concerns over the impact of artificial intelligence (AI) on Canva's business and the increasing costs associated with integrating AI technology into its platforms. The firm's valuation has reportedly decreased over the past year, with its value reportedly dropping to approximately A$49bn after earlier being downgraded from A$60bn to A$49bn by two of its backers, Blackbird Ventures and Airtree.

Canva also acknowledged that soaring AI expenses related to the rollout of new products contributed to the financial challenges.

Perkins emphasized that the company's growth had slowed for the first time in a decade, citing the transformative nature of new technologies in the design and presentation industry. In response to these changes, Canva announced that Sydney would become the primary hub for its product teams, and employees would be expected to spend two to three days in the office each week. Moreover, the company expects hybrid workers to adhere to this schedule starting next year.

Founded by Perkins in 2013, Canva provides a user-friendly platform with templates and tools designed to help individuals lacking technical skills or design expertise create professional-looking graphics and presentations. These offerings range from wedding invitations to business pitch decks.