Canva Cuts 22% of Workforce Amid Growth Slowdown and Rising AI Costs

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Design platform Canva is laying off 1,271 employees as it confronts its first growth slowdown in a decade and rising AI expenses, prompting organizational restructuring and new work model policies.

Canva, the popular online design software company, announced a significant reduction of its workforce, cutting 22% of its staff which equates to 1,271 employees. This move comes as the company faces its first growth slowdown in over ten years, marking what CEO Melanie Perkins described as "our hardest year yet."

Founded thirteen years ago, Canva has grown into a platform utilized by hundreds of millions worldwide. However, Perkins highlighted that the prior success does not ensure future growth. The company experienced reduced revenue growth expectations, lowering its forecast from 30% to 20%, largely due to escalating costs related to artificial intelligence (AI) development and integration.

To address these challenges, Canva is reorganizing internally by merging its product, growth, and platform teams. This aims to streamline communication and reduce internal friction. Additionally, Canva plans to diminish "subspecialisation," encouraging employees to assume broader responsibilities. This change accompanies a shift toward a hybrid working model where employees will work from the office several days per week.

Despite actively developing its own AI models to reduce dependency on costly third-party AI services, Canva faces substantial competition from emerging AI startups and versatile chatbots such as ChatGPT and Gemini. These competitors offer image generation tools that simplify creating visual content like posters and presentations, directly overlapping Canva's market.

Earlier in 2026, Canva's valuation was adjusted down to approximately $35 billion by early investors, reflecting market uncertainty amidst these developments. The company's recent layoffs exemplify the broader tech industry challenges posed by evolving AI technologies and changing market dynamics.