The software and IT industry is going through a particularly tough phase, with layoffs affecting a large number of professionals across the sector. In the latest development, design software maker Canva lays off around 1,271 of its people, TechCrunch reports. That accounts for around 22% of the workforce. This comes amid a slowdown in the company’s growth.
Canva lays off people as growth slows for the first time in a decade
In a note to employees, Canva co-founder and CEO Melanie Perkins said that while the company has scaled so far, it needs to evolve to address slowing growth. Besides announcing layoffs, Canva is making some internal restructuring. It is merging its product, growth, and platform teams to reduce communication barriers. It is also reducing “subspecialisation,” meaning employees may have to take up more responsibilities.
“Over the past thirteen years, we’ve turned a dream in a pitch deck into a platform used by hundreds of millions of people. None of it would have been possible without the talent, imagination, and care of every single person who has been part of this journey. Yet success in our first chapter doesn’t guarantee success in the next. 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,” Perkins wrote.
Internal restructuring
Additionally, Canva is also moving towards a hybrid work model. Employees will have to work from the office a few days a week. The company has been shipping its own AI models to reduce costs and reliance on third-party models. Despite that, it still had to cut its revenue growth forecast to 20% from 30% to address rising AI costs. This also prompted Canva’s early investors to lower its valuation to around $35 billion earlier this year.
While that’s that, Canva is facing growing competition from AI startups and chatbots like ChatGPT and Gemini. Their image-generation capabilities have simplified things for users in creating posters and presentations.
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