Canva Cuts 22% of Staff Amid AI Uncertainty

Canva, the celebrated Australian startup, has announced a significant restructuring that will impact 1,271 employees, representing 22% of its workforce. This challenging period, described by co-founder and CEO Melanie Perkins as "without doubt the hardest moment in our thirteen-year history," involves job cuts, role changes, and relocation requests for affected staff. The company has grappled with a notable decrease in its valuation over the past year. Concerns surrounding the impact of artificial intelligence on its business model and the substantial costs of integrating this technology have contributed to this financial adjustment. Perkins acknowledged that the company's growth has slowed for the first time in a decade, necessitating "significant changes" to navigate the evolving landscape.

Sydney has been designated as the "primary home" for more product teams, and beginning next year, hybrid employees will be required to spend two to three days per week in the office. This strategic shift follows a reported downgrade in Canva's valuation by key backers, from A$60bn to approximately A$49bn. The company has also reportedly reduced its internal valuation due to soaring AI expenses associated with the rollout of new products. Perkins emphasized that new technology is fundamentally transforming creative processes and user expectations, highlighting the need for Canva to adapt and innovate to remain competitive in the dynamic digital design market.