Canva cuts 22 percent of workforce and offers extensive severance support

Popular design software company Canva is reducing its workforce by about 22 per cent, affecting 1,271 employees, amid slowing growth and rising tech sector layoffs.

Internal Changes

Co-founder and CEO Melanie Perkins stated in a memo that the company needed to change to address slowing growth, which has slowed for the first time in a decade during this hard year. The company is merging its product, growth, and platform teams, asking employees to take on more responsibilities, and requiring staff to work from an office a few days a week.

Business Pressures

Canva has been developing its own AI models to reduce reliance on external providers, but rising AI expenses forced it to lower its revenue growth forecast from 30 per cent to 20 per cent. Early investors cut Canva's valuation to around $35 billion earlier this year, while the company also faces growing competition from AI startups and chatbots like ChatGPT and Gemini that offer easy image-generation tools.

Severance Package

Departing employees are allowed to keep their company-issued MacBooks and will receive at least six months of salary as severance. The company is also providing a one-year LinkedIn Premium subscription, career coaching, resume assistance, and an opt-in alumni directory.

Support And Equity

Employees will receive up to 12 months of continued healthcare coverage and retain access to Canva Care for a year. New staff who joined within the past year will bypass the usual one-year vesting cliff to retain equity, and departing employees interested in starting new ventures can receive US$10,000 grants from the Canva Collective Fund without equity taken in return.

Context

Large tech companies frequently adjust staffing levels and workplace policies in response to shifting market demands and rising technology costs. Generous severance packages and career support during downsizing are uncommon in the corporate sector, which draws significant public attention when they do occur.