Canva cuts 22% of its workforce without naming AI, but the 're-founding' looks like an AI pivot

Canva has announced a restructure affecting 1,271 jobs, or 22% of its global workforce. That is more than one in five employees. CEO and co-founder Melanie Perkins told staff in a company-wide note. She called it the hardest moment in the company's 13-year history. The figure covers three groups: people losing their jobs, people whose roles are changing and people being relocated. Canva has not said how many will lose their jobs outright. Our thesis is that this is not a classic AI-replaces-workers story. It is something more revealing: a company whose core business is being commoditised by AI, cutting staff to pay for its own move into AI.

Perkins was blunt about the reason. For the first time in a decade, growth has slowed. She also pointed to 'new technology' that is changing how people create and use products. Her note never names artificial intelligence. However, the Australian Broadcasting Corporation reported that the restructure is meant to position Canva to build AI-related products. Perkins wants to 're-found' the company around small, empowered teams that take ownership. More product teams will be concentrated in Sydney, and some staff will be asked to move there. From January, most hybrid staff will be expected in the office two to three days a week, depending on the team.

The context explains the reluctance to say 'AI'. New tools can produce images, layouts and slides from a short text prompt. That is Canva's home ground. The company has embraced the technology. SmartCompany reported in August that Canva had become the world's second most-visited AI platform, reportedly ahead of Claude, Grok and Gemini. But the same outlet reported that Canva had lost another $11 billion in valuation, following earlier falls. There is a precedent too. In 2025 Canva let go of 10 to 12 technical writers, in a move reports linked to a push for staff to use generative AI tools. Canva said at the time it was changing how it approaches technical writing.

The severance package stands out. Departing staff get at least six months' salary including entitlements, a year of healthcare, wellbeing support and a US$10,000 grant fund for anyone starting a business or community project. For some recent hires, Canva is also removing the one-year vesting cliff, the waiting period before an employee receives any shares. Without that change, they would have left with no equity at all. That is well above the norm. It does not make the cuts painless, but it sets a standard others should be measured against. The wider picture is grim. Atlassian cut 1,600 jobs in March 2026, nearly 500 of them in Australia, and said explicitly that AI would let it reduce headcount. Block and WiseTech Global have also announced major cuts. One tracker counted 245,953 tech workers laid off across 783 companies in 2025.

Our reading: Canva is a textbook case of the question we keep asking about AI-linked layoffs. Is AI the cause, the cover story or the thing being paid for? Here it looks like all three at once, and the cause is mostly indirect. AI is not mainly replacing Canva employees. It is shrinking the value of what Canva sells, which slows growth and hits the valuation. The company is then cutting costs to fund the response. Avoiding the word 'AI' looks like careful framing, both to protect morale and to avoid admitting that its moat is eroding. In the short term this is a hard transition, and it lands on real people. In the long term, the promise that 'anyone can design anything' is coming true faster than Canva planned, and in a form it does not fully control. When producing a design is nearly free, value moves to taste, distribution and the workflows around the design. Canva's bet is that small teams in Sydney can win that next phase. The size of the cut suggests management knows the old model will not get it there.