Canva restructures 1,271 roles as AI costs and competition bite

Sydney-based design platform Canva has announced a company-wide restructure affecting 1,271 roles, or about 22 per cent of its global workforce. In a company note sent on Wednesday, co-founder and chief executive Melanie Perkins said the business is cutting management layers, relocating staff to primary hubs, and letting go of staff who helped build the business.

The move follows Canva's first revenue growth slowdown in ten years, alongside investor pressure and intensifying competition from AI image and media tools.

Shifting resources to manage AI expenses

Canva built its early success on easy-to-use graphic templates, but recently attempted an aggressive pivot dubbed Canva 2.0 to embed generative AI across its software suite. That rollout ran into commercial hurdles. Generating images and editing visual assets using machine learning requires heavy computing power, and Canva struggled with the high compute costs of serving those tools to a predominantly unpaid user base.

The company previously cut its annual revenue growth projection from 30 per cent down to 20 per cent. Large investment backers, including Blackbird and T. Rowe Price, followed by trimming their internal valuations of the business.

To counter the pressure, Canva will merge its platform, growth and product teams into a single division. It is centralising product work in Sydney and requiring hybrid staff to work from offices two to three days a week starting January. Departing employees are receiving a minimum of six months of salary and extended healthcare cover, with the option to apply for venture grants to launch new projects.

What this means for Australian businesses

Many Australian small and medium businesses rely on Canva every day for social media graphics, client brochures and presentations. The restructuring offers practical lessons for managing software and AI spending.

• Free AI features are unlikely to stay free. Canva's challenges show the real hosting bills behind generative features. Expect software vendors to restrict free tiers, add extra usage fees, or require paid upgrades to access advanced editing models.
• Audit team software subscriptions. When software platforms experience internal churn or sudden product shifts, review whether your business still needs premium tiers. Many smaller firms pay for multiple software accounts that duplicate basic functions.
• Keep alternative tools in mind. As standalone generative AI tools from OpenAI, Google and open-source projects improve, small businesses do not need to rely on a single vendor for design, image editing and marketing assets.