Canva's Trump layoffs
Canva has finally unveiled its job cuts. The bigger question remains what the company is now actually worth.
If you were Australia’s largest private technology company holding on to a dream of going public, how would you bury bad news? If you guessed ‘Waiting until the day of a globally significant event in the hope no one notices’, you’d be correct. Canva kicked off its first round of major layoffs in its 13-year history on Wednesday, the same day as the United States mid-term elections.
Canva’s looming redundancies were revealed by Rampart last month and will cap off a tumultuous year for the business as it has grappled with a sudden inability to meaningfully grow its revenue and operating margin. Canva’s internal valuation has fallen to $US31 billion ($44.5 billion) from $US42 billion over the past six months after it told investors it would miss its forecasts due to the costs of its artificial intelligence tools and stagnant user growth.
Amelia McGuire
About 22 per cent of Canva’s 5,500 strong workforce will be made redundant, the company confirmed on Wednesday. The 1,271 people received a generic email from chief executive Melanie Perkins at 7am and will each then be called to a meeting with a human resources representative and a leader of their department. A small fraction will be redeployed into new roles but Perkins said Canva has become too fragmented and needed to simplify its product, growth and platform arms by merging them into one division.
"This is without doubt the hardest moment in our 13 year history. Behind every decision is someone we care deeply about, and I know the consequences will be very real for those directly affected, their families and teammates. I’m deeply sorry for the pain and disruption this will cause for everyone affected," Perkins wrote.
To say the redundancy packages are generous would be an understatement. Those affected will receive at least six months of salary, 12 months of continued healthcare, their laptop and a $US10,000 grant if they want to start a business. The minimum corporate redundancy payouts in Australia range from four to 16 weeks of base pay as directed by National Employment Standards, but that would never fly in tech.
