Canva Layoff 2026 &Workforce Restructuring: What Leaders Need to Understand
Artificial intelligence is pushing businesses to rethink how they operate, compete, and grow. Companies are investing heavily in AI tools, automating processes, and redesigning their teams to improve efficiency. But amid this race to embrace AI, an important question is emerging: Are businesses transforming themselves for the future, or are they simply finding new ways to reduce costs?
Canva’s recent layoffs and workforce restructuring bring this question into sharp focus. While the company has cited slowing growth and organizational changes as reasons for the decision, the development comes at a time when AI is reshaping the technology industry and putting pressure on established business models.
For CTOs and business leaders, Canva’s restructuring offers an opportunity to reconsider their approach to workforce planning.
Canva layoffs 2026: What happened?
On November 4, Canva published a message from co-founder and CEO Melanie Perkins titled An Important Update on Our Team. The announcement confirmed that 1,271 employees, representing approximately 22% of the workforce, would be affected by a major organizational restructuring.
Not everyone affected will lose their jobs. Some employees will move into different roles, while others will be asked to relocate to centralized offices. The restructuring will also result in job losses.
Perkins described the decision as the most difficult moment in the company’s 13-year history. She said Canva had experienced slower growth for the first time in a decade and that smaller organisational adjustments would not be enough to prepare the business for its next phase.
The company also plans to consolidate teams, reduce management layers and bring more employees together in its Sydney offices.
Read Canva’s official restructuring announcement.
Why is Canva restructuring its workforce?
Canva’s restructuring reflects three overlapping business pressures: slowing growth, increasing competition and the rising cost of building an AI-powered platform.
Slowing growth
Canva’s growth has slowed for the first time in a decade, according to Perkins. The company reportedly reduced its 2026 revenue growth forecast from 30% to 20%, indicating that its previous growth trajectory was becoming harder to sustain.
This creates pressure to reconsider how the company allocates resources, manages teams and prioritizes product development.
For a technology business that has expanded rapidly, maintaining the same organisational structure during a period of slower growth can become increasingly expensive.
AI is changing the design software market
Canva is also operating in a market where AI is changing how people create visual content.
Generative AI tools from companies such as OpenAI and Google can now produce images, presentations and other creative assets from simple prompts. Tasks that once required specialised software skills and multiple production steps are becoming more accessible.
This puts pressure on established design platforms to offer more than traditional editing and publishing capabilities.
Canva has been developing its own AI models and integrating AI features into its platform. However, it must also compete with general-purpose AI tools that are expanding into creative workflows.
For Canva, the challenge is to make its platform valuable enough to retain users while adapting to a market where the barriers to creating visual content are falling.
Rising AI costs and investor pressure
Building AI capabilities also introduces significant infrastructure and development costs.
According to TechCrunch, Canva’s reduced growth forecast was accompanied by rising AI-related expenses. The company has been developing its own models to reduce reliance on third-party providers, but building and operating AI infrastructure requires substantial investment.
Investor confidence is another consideration. In August 2026, Canva’s valuation was reportedly marked down by major investors, including T. Rowe Price and Franklin Templeton, bringing its valuation to approximately $34.9 billion.
Together, these pressures make operational efficiency, product differentiation and resource allocation increasingly important.
What is changing inside Canva?
Canva’s restructuring involves three significant changes to how the company organises its workforce and manages product development.
1. Product, growth and platform teams will be combined
Canva plans to bring its Product, Growth and Platform teams under a single Product organization.
The objective is to reduce interdepartmental handovers, simplify decision-making and give teams greater ownership of business priorities.
For technology leaders, this represents a shift towards more integrated product development. Instead of having separate functions coordinate across multiple layers, teams can work towards shared product outcomes.
2. Fewer specializations and management layers
Canva also plans to consolidate narrower specializations into broader roles and simplify its management hierarchy.
The company wants employees to take greater ownership of projects and business objectives from beginning to end, reducing fragmented responsibilities and overlapping management structures.
This reflects a broader organisational challenge facing technology companies: as AI automates more specialised tasks, businesses must reconsider how roles are defined and where human expertise adds the most value.
However, broader roles also require employees to develop new capabilities. Simplifying an organisational chart does not automatically eliminate the need for specialised technical knowledge.
3. Greater in-person collaboration and team relocation
Canva plans to make Sydney the primary location for more of its product teams and selected other functions.
It also expects most hybrid employees to spend two to three days a week in the office from January 2027, depending on their location and role.
According to Perkins, the move is intended to strengthen collaboration, reduce organizational friction and help teams work more closely.
The relocation requirements will also affect employees whose existing roles are based elsewhere, adding another dimension to the restructuring.
What CTOs should take away from Canva’s restructuring
Canva’s decision raises a broader question for technology leaders: Is AI adoption delivering a genuine transformation in how organisations work, or are businesses primarily using it to reduce operating costs?
The distinction matters.
Deploying AI tools across existing departments does not necessarily produce a more efficient organization. Companies must also reconsider workflows, responsibilities, decision-making structures and the skills their teams need.
Research supports this approach. Gartner’s July 2025 survey of 1,973 managers found that business units redesigning how work gets done, rather than simply deploying AI tools, were twice as likely to exceed their revenue goals.
McKinsey’s 2025 State of AI research offers another useful indicator: 55% of AI high performers reported fundamentally redesigning workflows, compared with 20% of other respondents.
These findings point to an important consideration for CTOs: AI investment needs to be accompanied by organizational redesign if businesses want to realize its full value.
Canva’s restructuring illustrates what that redesign can involve: consolidating teams, broadening responsibilities, reducing management layers and reallocating resources towards new product priorities.
However, there is a difference between redesigning work and simply reducing headcount.
Technology leaders should evaluate whether AI investments are improving product development, accelerating innovation and creating new business opportunities, alongside measuring cost savings and productivity gains.
The real test of an AI-driven operating model is whether it makes an organisation more competitive and adaptable, not simply smaller.
Are businesses underestimating the true cost of AI adoption?
One of the biggest mistakes CTOs and business leaders can make is assuming that introducing AI will automatically reduce business costs.
While AI can work simple, implementing it across an organization involves considerable investment, planning, and ongoing management.
Businesses need to account for AI infrastructure, model usage costs, data management, system integration, cybersecurity, governance, employee training, and continuous monitoring. As AI adoption expands, these expenses can add up. In some cases, the cost of running and maintaining AI systems may even outweigh the initial productivity gains.
Likewise, AI may complete certain activities more quickly, but employees are still needed to review outputs, handle exceptions, exercise judgment, maintain accountability, and ensure the technology delivers meaningful business outcomes.
For CTOs, the challenge is to look beyond the promise of automation and understand the actual return on investment. Cutting jobs based on the assumption that AI can take over entire roles could leave businesses with skills gaps, operational challenges, and unexpected costs.
The wider consequences of layoffs and workforce restructuring
Layoffs and workforce restructuring can have several impacts on the wider business. While it can be seen as a positive step to streamline operations and prepare for future growth, there are concerns about how employees feel, how the business will perform, and the impact on customer service.
Here are some possible consequences worth exploring and what leaders can do to address them.
Loss of experienced talent and institutional knowledge
When experienced employees leave, a company risks losing more than just its workforce. It can lose years of product knowledge, technical expertise, customer relationships, and an understanding of internal processes.
Even with knowledge-transfer plans and proper documentation, replacing this experience can take considerable time. Employees taking over these responsibilities may initially struggle to understand existing systems, workflows, and business priorities.
Some might even take months to become fully familiar with the processes and work independently. This learning curve can slow down projects, delay important decisions, and disrupt business continuity.
What can leaders do?
Have a plan in place before experienced employees leave the organization.
Identify critical roles, document important processes, and ensure that essential product knowledge, technical expertise, and customer insights are shared with the right teams. Pairing experienced employees with colleagues who will take over their responsibilities can also make the transition smoother.
At the same time, give employees enough time and support to understand new responsibilities. Wherever needed, include structured training and learning materials for new employees.
Increased pressure on remaining employees
Having fewer employees and fewer layers of management can speed up decision-making within a business. However, this can put more pressure on the remaining employees.
By consolidating roles without considering workload, employees may end up with more projects to manage, broader roles, and fewer resources. This can cause increased stress, lower morale, and burnout.
What can leaders do?
Look at workload and priorities. Don’t just move roles from departing employees to current employees. Be clear about roles, set realistic expectations, and look at processes that can be automated or removed. Have regular conversations with employees to understand where teams may be struggling.
Loss of trust and confidence
When a major restructuring occurs in the business, it creates uncertainty for everyone involved, including employees who may not be directly affected. They may begin to question the security of their own roles and wonder whether more changes are on the horizon.
This uncertainty can shake employees’ confidence and affect their outlook toward the company. Some may also become reluctant to take risks, share new ideas, or commit to long-term projects if they feel uncertain about their future within the organization.
What can leaders do?
To rebuild confidence, be clear and transparent with your communication. Let employees understand why the restructuring is happening, what it means for their current teams, and what the company’s future looks like.
Most importantly, be sure that your leadership reflects what you’re saying. The more consistent you are in your leadership, the more trust employees will have.
Greater scrutiny of leadership decisions
Any major restructuring can catch the attention of the investors, partners, customers, and the wider tech community.
It can raise questions over whether the company will be able to execute, drive growth, maintain margins, and remain competitive.
What can leaders do?
Assure your investors, partners, and customers that the company is set up for long-term victory. Be clear in your communication and ensure your business strategy shows how the new structure will facilitate growth, increase efficiency, and increase your competitiveness.
Impact on employer brand
The way a company handles layoffs can have a lasting impact on its employer brand and reputation in the job market. If employees are treated poorly during the process, it can create negative perceptions among people.
In the future, talented professionals may be reluctant to join an organization known for handling workforce reductions poorly, as they may question its workplace culture, leadership decisions, and long-term job security.
Over time, this could make it harder for the company to attract talent, especially within the technology industry where competition is fierce!
What can leaders do?
Handle workforce restructuring and layoff processes with empathy. By treating people with dignity throughout the process and ensuring that organizational values are reflected in their actions, leaders can protect their employer brand and maintain trust in the workplace.
The bigger picture: The real test of leadership begins after restructuring
Restructuring or layoffs are only one part of the transformation. The real test of leadership begins afterward. They need to stay clear-headed, aligned, and decisive when conditions shift.
Ultimately, how leaders treat employees and navigate change during periods of disruption will matter just as much as the business results they achieve.
In moments like these, leadership is not measured by intent. It is measured by impact.
Will AI make layoffs and workforce restructuring more common?
It is possible that more businesses may resort to layoffs and workforce restructuring as AI takes on more tasks and changes how work gets done. However, AI is only one part of the picture.
Economic uncertainty, competitive pressure, changing customer demand, over-hiring, and cost management can also drive these decisions. It is critical to recognize between companies that are reducing headcount because of AI and those restructuring for broader business reasons. The Canva layoff 2026, for instance, should not automatically be interpreted as evidence that AI is replacing all the jobs being eliminated.
Nevertheless, as technology advances and business needs evolve, the nature of employment itself may change. Some jobs will disappear, others will evolve, and entirely new roles will emerge.
The challenge for businesses will be to ensure employees have the opportunities to reskill, develop new capabilities, and transition into emerging roles rather than being left behind by technological change.
In brief
The 2026 Canva layoff serves as a reminder of how AI is reshaping jobs and business operations.
CTOs and business leaders must therefore approach workforce transformation with careful planning. They must understand which roles are changing, which skills need to be developed, and where human expertise remains essential.
Businesses need to ensure that efforts to improve efficiency do not weaken the very capabilities that support innovation, customer satisfaction and sustainable growth.
