Australian tech giant Canva will slash hundreds of jobs and is asking staff to relocate overseas as the Sydney-headquartered company attempts to streamline its business.
The design company’s co-founder and chief executive Melanie Perkins messaged staff on Wednesday, giving some details of job cuts and relocations which will in total affect 1271 people, or 22 per cent of Canva’s workforce.
“This is without doubt the hardest moment in our thirteen-year history,” Ms Perkins said in the message, which was posted by the company as a media release.
“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.
“After exploring a wide range of alternatives, I’ve come to the difficult conclusion that small changes won’t be enough.”
The message to staff does not detail specifically how many jobs are being cut or how many are being restructured. Affected staff will lose access to their work Gmail and Slack at the end of the week.
Melbourne-based AI and digital consultant, Adam Barty, said artificial intelligence in general was a major threat to Canva.
“If you look at what AI models can currently do in terms of video and visual design, and then consider how those capabilities are likely to advance over the next few years, it’s pretty hard not to view AI as an existential threat to Canva’s core business model,” the Revium managing director said.
“At present Canva still has a strong user base. The reality is that those users may now be the largest asset on their balance sheet, rather than their proprietary software platform.
“The question then becomes how they can prevent that asset from atrophying in the face of expanded competition coming from AI labs and startups,” he said.
The publicly released message from Canva does say every worker who loses their job will be paid six months of salary, keep their healthcare for 12 months in countries where that is provided, keep their MacBooks, and can apply for a $US10,000 grant to start a new business.
Less than two weeks ago, Canva launched its AI image generator which independent testing found outranked Google, Meta, Microsoft, xAI and ByteDance.
The company had been forced to shelve the image generator launch for two months and quickly figure out a way to make it cheaper.
Australian-based venture capital firm Blackbird, which is Canva’s largest backer, slashed its valuation of the company by 17 per cent in August.
Wednesday’s job cuts and restructures were an effort to “get back to spending more time building, and less time navigating how work gets done”, Ms Perkins said.
Sydney will become the primary working location for Canva’s product teams, and most staff will be expected to come into the office “around” two to three days a week from January.
“We know relocating is a big decision for those being asked to consider it, and we’re committed to making the process as smooth as possible with comprehensive support,” Ms Perkins said.
“We also want to bring more teams together in person to build trust, learn from one another and strengthen the connections that make Canva special.”
Canva does not publish exact figures for how many of its staff work in which locations, though it does disclose staff are in 37 countries.
Roughly 20 per cent – about 1200 staff – work in Sydney, there are smaller hubs in China and the Philippines, and then smaller outposts again in North and South America, Europe and Africa.
As well as looking to increase in-person collaboration, the restructures are intended to reduce “fragmentation” and consolidate “overlapping responsibilities”.
“Improving one part of our product often requires navigating … more handovers and co-ordination than necessary,” Ms Perkins said.
“This has made it harder to take ownership of bigger problems and to build a deeply unified product for our community. We’ve tried many ways to solve this over the years, but it’s become clear we need to revisit our underlying structure.”
As well as the six-month salary payouts and keeping of work MacBooks, workers can opt in to a Canva “alumni” staff directory which investors can access, and Canva will also offer departing staff “dedicated career support, including one-on-one coaching, interview preparation, and one year of LinkedIn Premium”.
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