Analysis
Canva is laying off 1,271 people, about 22% of its staff, as the design software company's growth slows, TechCrunch reported on November 4, 2026. CEO Melanie Perkins told staff: "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." On TechCrunch's figures, the cut implies a pre-layoff workforce of roughly 5,800, a Pulse calculation.
What Canva does
Canva sells browser-based design tools on a freemium model, with paid individual, team and enterprise plans layered on top. Over thirteen years it has grown into what Perkins calls "a platform used by hundreds of millions of people." Pulse reported in August, citing Startup Daily, that Canva served 265 million monthly active users and had reached roughly $4 billion of annual recurring revenue in 2025. Fox Business says the company operates across 37 countries. For the full model, see our breakdown of how Canva makes money.
Why is Canva laying off staff?
AI costs are the core of it. Canva has been shipping its own AI models to cut costs and reliance on third-party models, TechCrunch reported, but it still had to cut its revenue growth forecast to 20% from 30% to absorb ballooning AI costs. Pulse's August coverage, citing Startup Daily, said Canva had relied heavily on frontier models from providers such as OpenAI and Anthropic, and had since cut AI serving costs by about 90% through in-house models and acquisitions including Leonardo.AI.
“Early investors cut its valuation to about $35 billion earlier this year, according to TechCrunch, which linked that figure to SmartCompany's reporting.”
The reorganization merges product, growth and platform teams and reduces "subspecialisation," so remaining employees will take on broader roles, per TechCrunch. Sydney becomes the primary hub for product teams, management layers are being reduced, and hybrid staff will work from the office two to three days a week starting in January, Fox Business reported.
Canva valuation and the severance terms
The slowdown has already cost Canva on paper. Early investors cut its valuation to about $35 billion earlier this year, according to TechCrunch, which linked that figure to SmartCompany's reporting. The exit terms, per Fox Business:
- Severance: at least six months of salary.
- Health care: 12 months of continued coverage where applicable.
- Equity: the one-year vesting cliff removed for recent hires.
- Founder grants: $10,000 for departing employees who start a business, plus career coaching and job-search help.
Canva competitors in AI design
Canva faces rising competition from AI startups and from general-purpose chatbots such as ChatGPT and Gemini that now generate images, TechCrunch noted. Pulse covered one of the sharpest examples in September, when Google began rolling out Pics, an AI design tool inside Workspace built on its Nano Banana image model. Adobe Express competes from the other side, with a blank-canvas tool for creators.
The bull case has not disappeared. A business with hundreds of millions of users and its own models is still forecasting 20% growth. The risk is the direction: AI features that drive engagement also drive inference bills, and every point of growth Canva buys with AI now costs more than it did when templates were the product. Perkins has a company-wide meeting scheduled for November 10, Fox Business reported.