Canva cuts 1,271 jobs citing rising AI development costs

Australian design platform Canva has announced a major restructuring that affects 1,271 employees, representing approximately 22% of its global workforce. The changes include a mix of job cuts, relocations, and role adjustments as the company attempts to navigate a difficult period. Co-founder and CEO Melanie Perkins characterized the decision as the "hardest moment" in Canva’s 13-year history, attributing the move to a combination of slowed revenue growth and the escalating financial demands of artificial intelligence development.

As part of the organizational shift, Sydney is set to become the primary hub for the company's product development teams. This centralization will be accompanied by a new hybrid work model for employees, scheduled to take effect next year. Perkins noted that the rising costs of competing in the AI space have forced the company to reconsider its operational structure to ensure long-term sustainability. The announcement highlights the immense pressure even established software giants face when integrating resource-heavy AI features into their core products.

These internal changes coincide with a significant downward adjustment in Canva's market valuation. The company’s value was recently revised from A$60 billion to A$49 billion, a drop that reflects broader market skepticism and concerns regarding the long-term impact of generative AI on the design software industry. By streamlining its workforce and centralizing operations in Australia, Canva aims to stabilize its financial position and refocus its resources on high-priority technological advancements.