‘The Hardest Moment in Our History’: Canva Wields the Axe on More Than 1,200 Jobs as Melanie Perkins Admits Australia’s Tech Golden Child Has Stalled and AI Rivals Close In
- Up to 1,271 workers, more than one in five of Canva’s entire workforce, face redundancy, a changed role or relocation in a sweeping overhaul of the Sydney design giant
- Founder Melanie Perkins concedes growth has slowed for the first time in a decade and says “small changes won’t be enough” to fix it
- Departing staff will get at least six months’ pay and a year of healthcare, while survivors will be ordered back to the office two to three days a week from January
- The upheaval comes as fears grow that artificial intelligence is threatening the very business models that turned Australian tech firms into global champions
For more than a decade, Canva was the story Australia told itself about what was possible.
A homegrown start-up that took on Silicon Valley and won. A Sydney success that proved world-beating technology did not have to come out of California.
On Wednesday, that story took a brutal turn.
Hundreds of workers opened their inboxes to learn their futures were suddenly uncertain, as the design platform unveiled the deepest restructure in its history, one that will touch as many as 1,271 jobs.
The figure represents roughly 22 per cent of the company’s headcount. Some positions will disappear entirely.
Others will be reshaped, or moved to a different location.
The news came directly from the top. Co-founder and chief executive Melanie Perkins delivered it in a memo sent to every staff member, later published on the company’s website.
She did not dress it up.
Perkins described it as “without doubt the hardest moment” in Canva’s 13 years, acknowledging that each decision affected a real person, and that the fallout would ripple through families, friendships and teams.
Her explanation was stark. Canva’s growth, she revealed, had slowed for the first time in ten years, a warning the company had already flagged earlier in the year.
After weighing a range of options, she said she had concluded that tinkering at the edges would not cut it.
Instead, the company plans to “refound” itself.
That means merging some functions, consolidating more product teams in Sydney as their primary base, and tightening expectations on where staff work. From January, most employees on hybrid arrangements will be required in the office for two to three days each week.
Perkins later took the message to LinkedIn, where she said the company was farewelling many “exceptionally talented people” who had helped build it.
She announced an opt-in alumni directory for departing staff, known internally as Canvanauts, and personally invited employers who are hiring to contact her so she could help broker introductions.
The redundancy package is generous by industry standards. Affected workers will receive no less than six months’ salary, inclusive of entitlements, along with twelve months of ongoing healthcare cover.
Canva is also establishing a fund offering grants of US$10,000, around A$14,350, to former employees who want to start their own businesses or contribute to their communities.
But no severance cheque can fully cushion the shock of one of the most dramatic workforce cuts ever seen at an Australian tech company.
To understand why this is happening now, look at what has changed around Canva.
The platform built its empire on a simple promise: making design easy for people who are not designers. Drag, drop, publish.
It turned small business owners, teachers and social media managers into creators.
Yet that very promise is now being challenged by the explosive rise of artificial intelligence. Tools that can generate images, layouts and entire presentations from a single typed prompt are multiplying, and many are cheap or free.
Concerns have been mounting across the design sector that firms could haemorrhage customers to an increasingly crowded and aggressive AI industry. When the job of ‘making design easy’ can be done by a chatbot, the competitive moat narrows fast.
Canva has not been standing still on AI.
But even a company of its scale is not immune to a market shifting this quickly, and the slowdown Perkins described suggests the pressure is now showing up in the numbers.
It also reflects a broader reckoning across the global tech sector, where the hiring frenzy of recent years has given way to cost-cutting, consolidation and a renewed push to bring staff back into offices.
Analysis: What This Means for Australia
The significance of this restructure extends well beyond one company’s balance sheet.
Canva has been held up for years as proof that Australia can build globally dominant technology businesses. Its success has been used to argue for skilled migration, start-up investment and a stronger domestic tech sector.
A cut of this magnitude will inevitably raise questions about how secure that vision really is.
For the jobs market, the immediate effect is a sudden influx of highly skilled engineers, designers and product specialists competing for roles, many of them in Sydney, at a time when other tech employers are also trimming staff.
There is a social dimension, too. Tech workers who relocated their lives for Canva, including those on visas tied to employment, may face difficult decisions in the months ahead.
Workers navigating their rights during redundancy can find guidance through the Fair Work Ombudsman.
The decision to concentrate more product teams in Sydney, meanwhile, could be read as a vote of confidence in the city, but it also signals that roles elsewhere may be the ones moved or lost.
And the broader economic message is unmistakable. If AI can unsettle a company as well-resourced as Canva, smaller Australian firms in creative and digital industries may be even more exposed.
Policymakers watching technology sector employment and productivity data from the Australian Bureau of Statistics will be paying close attention.
Industry observers believe Canva’s move could mark a turning point, the moment Australian tech shifted from rapid expansion to defensive restructuring.
Workplace analysts say the return-to-office mandate is likely to prove contentious, particularly among staff who joined during the era of flexible work and now face both job uncertainty and changed conditions.
Technology sector insiders warn that the AI disruption Canva is grappling with is not a passing phase, and that companies across the creative economy will need to rethink their offering or risk being overtaken.
Others point out that the severance package, the alumni network and the start-up grants set a benchmark other employers will be measured against, and may help seed a new wave of Australian ventures founded by former staff.
For now, though, the mood is sombre. More than 1,200 people woke up on Wednesday with careers they thought were secure.
Australia’s most celebrated tech success story is fighting to reinvent itself, and its workers are paying the price.