Eight years ago, Laura Luland turned up at Canva for a one-day trial as co-founders Melanie Perkins and Cliff Obrecht’s first program manager. She walked out with the job.
On Wednesday she was on parental leave, juggling her daughter’s vaccinations and a toddler who needed bribing into a haircut, when the news landed. Her role was among 1271 being cut, changed or moved in the biggest shake-up in Canva’s history. She had been due back at work this month.
Luland built many of the rituals that made Canva feel like Canva: the company-wide ‘Season Openers’, the global offsites, the calendar that kept thousands of people marching in step. It was stuff that made the company an outlier, among what’s already a colourful and idiosyncratic sector. On LinkedIn, she still calls herself Canva’s “#1 cheerleader”.
On Tuesday, Perkins will face the company at its first all-hands meeting since the cuts tore through 22 per cent of its workforce. She’ll then get to work on the unenviable task of “refounding Canva” – her words – amid slumping morale and the most uncertain macroeconomic period in recent history.
Canva is the most valuable start-up Australia has ever produced, and alongside Atlassian is the country’s best proof that it can build a global software company from scratch. Its co-founders are now billionaires; its staff hold shares and Australian venture funds built their reputations on it. The super funds behind them are still waiting to be paid.
Whether Canva can grow again, rather than simply shrink, is an open question and will help determine not just the future of the employees who remain, but the success or otherwise of the broader Australian technology sector.
‘A sort of misery walk’
Perkins was 19 and tutoring students in Perth when she noticed how much they struggled with Photoshop. With her boyfriend, Obrecht, she borrowed $50,000 and started a school yearbook business out of her mother’s living room.
They were scrappy from the start. Their first venture sold airbrushed tattoos at country fairs. When yearbook customers rang asking for the manager, Obrecht would pause, pretend to pass the phone along, and come back on the line in a different voice.
More than 100 investors turned Canva down. Perkins took up kitesurfing to get time with one of them, Silicon Valley investor Bill Tai, who became an early backer. Through Tai, they met Google Maps co-creator Lars Rasmussen, who introduced them to Cameron Adams, a Google engineer who became the third co-founder. At the low point, Obrecht told this masthead in 2022, he and Perkins took “a sort of misery walk and just pulled ourselves up off the floor”.
The couple married in 2021 and have pledged to give away most of a fortune that has risen and fallen with Canva’s value. Perkins has long talked about a two-step plan. “Step one is to build one of the world’s most valuable companies, and step two is to do the most good we can,” she frequently says.
This week tested both steps at once. In her letter to staff, Perkins wrote that she was “deeply sorry for the pain and disruption this will cause for everyone affected”.
The three founders spent weeks on the detail and were involved in every decision, according to a person with knowledge of how the cuts were planned, who spoke on condition of anonymity. They repeatedly turned down the simplest options, the person said, such as a single company-wide meeting, cutting off everyone’s access at once and recalling laptops straight away to guard against data leaks. Instead, they chose one-to-one conversations with team leaders, and let departing staff keep their access through the week so they could say goodbye on their own terms.
Luland, for her part, thanked all three founders for taking a chance on her eight years ago.
‘Small changes won’t be enough’
Perkins’ letter set out the plan: Canva will fuse its product, growth and platform teams into one, fold specialists into broader roles and pull more product teams into Sydney. From January, staff who split their week between home and the office must come in two to three days a week.
The farewells flooding LinkedIn this week come mostly from product designers, product and program managers and content designers, in teams from Print and Growth to Mobile and Content. Departing staff said this week that around 70 per cent of product designers and 40 per cent of product managers had gone. Canva said it had not compiled a breakdown.
Canva says departing staff can apply for other roles there, though hiring will slow.
‘The best layoff on LinkedIn’
Outside Canva, the redundancy package has gone viral because of its generosity. Within hours of Perkins’ email, LinkedIn filled with posts from HR managers, recruiters and founders from the US to India, most with no connection to the company, holding it up as a model for how to let people go. Indian business paper Mint ran a story on the package alone.
Most fixed on the details: the MacBooks, the week of Slack access to say goodbye, and the $US10,000 ($14,500) grants with no strings attached. One US recruiter joked that it was hard to say which was the better deal, working for Canva or being laid off by it.
That minimum six-month salary payment to departing staff dwarfs what the law demands. Under the Fair Work Act, someone made redundant after three years gets seven weeks’ pay, and nobody gets more than 16. Most of those leaving are walking out with three to four times the legal minimum.
Inside, the mood is rawer. One departing content designer, who wrote the words people see in Canva’s app, uprooted his life in Singapore in 2023, drawn by Canva’s “be a good human” value. On Wednesday he wrote that he felt “frustration, relief, and clarity all at once”.
Another, a former Canva staffer, praised Perkins’ integrity but refused to join the applause. “Layoffs are the result of a systemic failure of leadership,” she wrote, and generous packages and kind messages “do not absolve leadership of their failures”.
Hitting the brakes
Canva’s growth has been sliding for two years. Revenue jumped 45 per cent in 2024 and 38 per cent in 2025. In August, Canva slashed this year’s forecast to 20 per cent and hit the brakes on its new AI products, because the cost of serving more than 200 million free users was eating into its profits.
The rival that rattles Canva’s backers most didn’t exist a year ago. Almost in the same breath as Canva’s biggest launch in April, AI company Anthropic unveiled Claude Design, a tool available free that turns a conversation into slides, posters and graphics. It’s effectively poaching Canva’s free users, the very people Canva relies on to find paying ones.
The company is attempting a fightback by building its own. Last month it launched two AI models, Craft and Brush, and the day before the cuts Canva tightened its partnership with OpenAI, the maker of ChatGPT.
Wesley Chan, an early Canva investor who advises the company and until recently sat on its board, dismisses the idea that free AI tools are eating Canva’s lunch. They aren’t really free, he argues: even on his $US100-a-month Claude plan, he burns through his allowance fast when doing design work. “Claude costs $100 a month to get enough compute to do any real design or creative work, which is five times the cost of Canva,” he told this masthead.
Chan, an early Google employee, has seen this play out before. Google cut jobs and restructured during the global financial crisis, then kept shipping products and became one of the most powerful companies on earth. “Canva has that chance. They need to keep launching great products faster, and if they do, history might not repeat itself but it does rhyme,” he said.
Jason Sedawie, vice-president of investments at investing platform Spaceship, points to Atlassian, which cut about 1600 roles in March and posted a record quarter by August. “Where Canva and Atlassian differ is timing; Atlassian restructured while in a strong position, but Canva is doing it only after the slowdown has arrived,” he said.
Even Atlassian hasn’t yet convinced the market. Its shares tumbled in after-hours trading on Wall Street overnight on Friday after it forecast slower subscription growth. “Canva has to make the same case from a weaker starting point,” Sedawie said.
‘When it makes sense’
A sharemarket float – the payday that staff and investors have chased for years – is further away than ever. Canva says it has always kept its timing flexible and will list when it makes sense for its staff and investors.
Its earliest backers are running out of road. In August, Airtree asked its investors to keep its first fund, raised in 2014, alive until July 2028 in the hope of an exit. Blackbird, which owns about 10 per cent of Canva, says it remains optimistic about its long-term potential.
Rasmussen, who also became an early Canva investor, says he is working with Perkins and Obrecht to find departing staff new jobs in Europe and Australia. “Canva remains a company with truly generational potential in my mind despite the challenges they have been facing this year,” he told this masthead.
Departing Canva staff have until December 14 to register for the start-up grants. Luland says she will take time with her family first. When Perkins faces the company on Tuesday, its first program manager will be watching from the sidelines, still cheering.
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David Swan is the technology editor for The Age and The Sydney Morning Herald. He was previously technology editor for The Australian newspaper.Connect via X or email.
