Design platform Canva has announced a significant workforce reduction, cutting 1,271 jobs, which represents 22% of its staff, as it confronts a slowdown in growth. CEO and co-founder Melanie Perkins addressed employees, acknowledging that despite the company’s impressive expansion over the past thirteen years, this year has been the most challenging yet. The growth deceleration marked Canva’s first in a decade, prompting the company to adjust its approach to sustain future success.

To improve efficiency, Canva is reorganizing its internal structure by merging its product, growth, and platform teams. This realignment aims to reduce communication barriers within the company. Canva is also moving away from extreme specialization, expecting employees to take on broader roles and responsibilities. Additionally, the firm is shifting toward a hybrid work model that encourages staff to be in the office several days a week, reflecting evolving work culture trends.

Financially, Canva has been focused on cost-cutting efforts, including developing proprietary AI models to lessen dependence on external providers. However, rising AI-related expenses have forced the company to lower its revenue growth forecast from an earlier projection of 30% to 20%. These financial pressures contributed to a reduction in Canva’s valuation, which early investors have decreased to around $35 billion earlier this year.

The company now faces heightened competition, especially from AI-driven startups and advanced chatbots like ChatGPT and Gemini, which offer accessible tools for generating images and presentations. As Canva adapts to these market dynamics, it aims to strengthen its position by refining its organizational strategy and enhancing its product offerings while navigating a more challenging economic environment.