The changes will consolidate Canva's product, growth and platform divisions into one organization, eliminate management layers and combine certain specialized positions into broader roles. Sydney will become the company's primary product development center, with some employees expected to move to designated regional hubs. Beginning in January, most employees on hybrid schedules will also be required to work from an office two or three days per week.
"After exploring a wide range of alternatives, I've come to the difficult conclusion that small changes won't be enough," Perkins wrote.
The restructuring follows a challenging period for Canva's AI strategy. The company has been repositioning its design platform around artificial intelligence through its Canva 2.0 initiative, but the expense of delivering AI features has complicated its growth plans. With much of Canva's user base accessing the platform for free, the cost of running advanced AI models has become an important consideration in its product development.
In August, Canva reduced its projected revenue growth for 2026 from 30% to 20%. Perkins attributed part of the pressure to the expense of processing AI requests, particularly the company's reliance on external frontier models. Those costs also contributed to delays in bringing certain AI products to market.
Canva has since worked to reduce its dependence on third-party models by shifting more AI processing to technology developed internally. The company reported in August that it had lowered the average cost of handling an AI task by 90%. Its proprietary video generation model reportedly operates at one-seventeenth the cost of a frontier model, while its image model costs approximately one-thirtieth as much.
Despite those improvements, Canva's financial performance has fallen short of internal expectations. Second-quarter revenue increased 25.2% from a year earlier to $921.9 million, but the result missed company guidance. Reported annualized revenue reached $3.69 billion, compared with an internal target of $5.2 billion. Canva currently has 31 million paying users.
The slowdown has also affected how investors value the privately held company. According to securities filings, T. Rowe Price reduced the carrying value of its Canva investment by 20%, pricing its shares at $1,189 each as of August 31. That implied a company valuation of approximately $30.4 billion, down from $40 billion at the beginning of 2026.
Other investors have made similar adjustments. Early backer Blackbird Ventures lowered its internal valuation by 17%, while Franklin Templeton also reduced the value assigned to its Canva holdings. The changes come as Canva has been preparing for a potential Nasdaq listing.
Alongside its internal restructuring, Canva is exploring additional ways to generate revenue from its AI investments. Last month, the company introduced Craft, a foundation model it intends to make available to outside developers. That initiative would allow Canva to commercialize its AI technology beyond the design tools offered through its existing platform.
For employees leaving the company, Canva has outlined a support package that includes at least six months of salary, inclusive of statutory entitlements, regardless of location. Eligible departing employees will also receive 12 months of continued healthcare coverage, career coaching, a year of LinkedIn Premium and the option to retain their company-issued MacBooks.
Canva is additionally removing the one-year equity vesting requirement for employees who joined within the past 12 months. Through a new Canva Collective Fund, departing workers can apply for $10,000 grants to support business ventures or community initiatives without surrendering an ownership stake.
An employee-wide meeting is scheduled for November 10 to address the changes.
Canva's announcement follows several other major technology workforce reductions in 2026. Atlassian eliminated approximately 1,600 positions in February, while Block cut 4,000 jobs in April. Microsoft also reportedly offered voluntary departure packages to roughly 60,000 employees last week.
For Canva, the immediate priority is reorganizing its workforce while improving the economics of its AI products. The company has demonstrated progress in reducing the cost of running its own models, but slower revenue growth and lower investor valuations have increased pressure to translate those technical improvements into stronger business performance.
This analysis is based on reporting from PYMTNS.
Image courtesy of NewsBytes.
This article was generated with AI assistance and reviewed for accuracy and quality.
