Canva is cutting 1,271 jobs, 22% of its workforce, after growth slowed for the first time in the design platform’s thirteen-year run. CEO Melanie Perkins told staff this has been “our hardest year yet,” citing rising AI compute costs and fiercer competition from ChatGPT and Gemini’s built-in image tools. Canva already cut its 2026 revenue growth forecast from 30% to 20%, and early investors marked the company’s valuation down to roughly $35 billion.
A decade of uninterrupted growth just ended
Canva went from a slide deck pitch in 2013 to a design platform used by hundreds of millions of people without ever hitting a real slowdown. That streak is over. In a note to employees reported by TechCrunch, Perkins wrote that “our growth has slowed for the first time in a decade,” language that lands harder coming from a founder who has spent years touting Canva’s unbroken climb.
The cuts are steep for a company that has avoided the mass layoffs rattling much of the software industry. Canva is trimming 1,271 roles, more than one in five people on staff. Perkins framed it as a structural reset rather than a one-off correction: “Yet success in our first chapter doesn’t guarantee success in the next. This has been our hardest year yet, and as we shared earlier this year, our growth has slowed for the first time in a decade.”
Canva has not disclosed how severance is being handled for the people losing their jobs, and the note to staff reported so far focuses on the business case rather than transition support. That is a notable gap for a company that has spent years marketing itself as a people-first employer, and it is worth watching whether more details surface once the cuts actually take effect.
AI is both the cost problem and the competitive threat
Two separate AI pressures are squeezing Canva at once. On the cost side, the company has been pouring money into its own AI models and the compute needed to run them, expenses that helped push leadership to cut its revenue growth forecast from 30% down to 20% earlier this year. Building in-house models was supposed to cut Canva’s reliance on third-party AI providers and bring costs down over time, but the near-term bill has been heavy enough to show up directly in this week’s note to staff.
On the competitive side, Canva is losing ground to tools that were never built as design software at all. ChatGPT and Gemini can now generate posters, social graphics and presentation slides straight from a text prompt, and casual users increasingly skip a dedicated design app altogether. That shift mirrors what we found when we rounded up the strongest AI image generators on the market this year: general-purpose chatbots have gotten good enough at visual output that they are eating into use cases that used to belong squarely to platforms like Canva. A company built on templates and drag-and-drop editing suddenly has to compete with tools that just answer a prompt.
Canva’s answer so far has been to build its own AI features directly into the product rather than simply bolt on a chatbot, betting that the people who already use Canva for work will prefer tools that stay inside the editor instead of jumping out to a separate AI app. That is a defensible strategy, but it is also an expensive one. Training and running proprietary models is not cheap, and Canva is absorbing that cost at the same time its core subscription business is growing more slowly than it used to. The company is effectively fighting a two-front war: it needs AI good enough to keep users from leaving, and it needs that AI to not be the thing that blows up its margins.
A reorg built around fewer specialists, more generalists
Alongside the layoffs, Canva is restructuring how it organizes work. The company is merging its product, growth and platform teams into a single structure, a move it says will cut down on communication friction between groups that previously operated with more separation. Canva is also pulling back on “subspecialization,” meaning employees who used to own a narrow slice of a project will likely be asked to cover more ground across a team.
The company is pairing that reorg with a return-to-office push, asking staff to work from an office a few days a week instead of the fully remote setup many had grown used to. None of this is framed as temporary. Perkins’s note reads like a company bracing for a longer stretch of tighter margins, not a quick correction before business snaps back to the old growth rate.
Part of a wider pattern in software
Canva isn’t alone in blaming AI economics for a round of cuts. Just two days earlier, Squarespace laid off 19% of its workforce as part of its own AI-driven restructuring, and a string of other software companies have made similar moves through 2026 as AI spending eats into margins even while it’s supposed to be the thing that saves them money down the line. The pattern is consistent: companies ramp up AI investment, the near-term costs outpace the savings, and headcount becomes the lever leadership pulls to close the gap.
What makes Canva’s version notable is the scale of the admission. This is a company that was privately valued near $50 billion at its peak and has spent years as one of the most-cited success stories in Australian tech. Investors have already marked that valuation down to about $35 billion, and a 22% staff cut is the kind of number that shows up in a growth-stage startup’s crisis memo, not in a mature platform with hundreds of millions of users. Canva is telling its own employees, in writing, that the easy years are behind it.
The bottom line
Canva’s problem isn’t that AI failed to show up. It’s that AI showed up on both sides of the ledger at once, driving up Canva’s own costs while handing casual users a free way to do a chunk of what Canva charges for. Cutting 1,271 jobs and reorganizing around generalists buys time, but it doesn’t change the basic math: a design platform now has to out-build chatbots at the exact thing chatbots are getting better at every few months. Perkins calling this the hardest year in Canva’s history isn’t just internal messaging. It’s a reasonable description of where every template-driven software company sits right now.
The Teck Hustlers Editorial Team covers technology, business, finance and gaming news for readers who want the story behind the headline. Every article is researched, written and edited by our in-house team, checked against company announcements, filings and reputable reporting, and updated when new facts emerge. We focus on what each development means for founders, professionals, investors and everyday users. Have a tip or a correction? Reach us through our contact page.
