Canva cuts 1,271 jobs amid slowing growth and rising AI costs

Canva is laying off 1,271 employees, representing 22% of its workforce, due to a slowdown in growth, TechCrunch reported. The company’s CEO described the past year as its hardest yet and acknowledged that growth has slowed for the first time in a decade.

To address these challenges, Canva is reorganizing its structure by merging product, growth, and platform teams to improve communication and reduce specialization, which means employees may take on broader responsibilities, according to TechCrunch.

The company is also shifting towards a hybrid work model, requiring employees to work from the office a few days per week. Canva has been developing its own AI models to cut costs and reduce dependence on third-party AI providers.

Despite these efforts, Canva lowered its revenue growth forecast from 30% to 20%, partly due to rising AI expenses. Early investors have adjusted the company’s valuation to about $35 billion this year.

Canva is facing increased competition from AI startups and general-purpose chatbots like ChatGPT and Gemini, which offer image generation features that compete with Canva’s design tools, TechCrunch noted.