Canva Lays Off 22% of Workforce: Compensation and Future Strategy

Canva has announced a major restructuring resulting in the layoff of 1,271 employees, representing 22% of its global workforce. This decision comes as the company navigates the first slowdown in business growth in its decade-long history and seeks to simplify its internal development processes.

• 1,271 employees (22% of the total staff) are affected by the cuts.
• Severance includes at least six months of salary.
• Each employee will receive a $10,000 grant for personal business or projects.
• The company will provide one year of medical insurance and let staff keep their MacBooks.

Reasons for Reorganization

CEO Melanie Perkins stated that internal bureaucracy and communication hurdles between the Product, Growth, and Platform divisions hampered product development. To address this, Canva is streamlining management and consolidating departments. The company has also lowered its 2026 revenue growth forecast from 30% to 20% due to market realities.

A significant factor in the restructuring is the rising cost of AI features. The company noted that the operational costs of its new AI tools were higher than projected, leading to a temporary slowdown in new feature launches. Employees will also face a shift toward stricter in-office attendance in Sydney starting in 2027.

The Severance Package

Industry observers have praised Canva for offering one of the most generous severance packages in recent tech history. Beyond standard legal requirements, the package includes six months of pay, a $10,000 grant to kickstart a business or community project, and one year of health insurance coverage. These measures aim to support employees during their transition.

Impact and Industry Outlook

The layoffs underscore the challenges facing even the most successful tech companies as they shift from hyper-growth to efficiency. The situation is particularly complex for international staff residing abroad on work visas, who now face limited time to secure new employment. For the broader IT sector, this signals a tightening of budgets and a more critical approach to AI investment profitability.