Canva Cuts 1,271 Jobs but Sets a New Bar for Severance

Canva is cutting 1,271 employees — roughly 22% of its global workforce — while handing departing staff one of the most generous severance packages the tech industry has seen: six months of salary, 12 months of healthcare coverage, and a $10,000 fund for anyone who wants to start a business.

The Australian design platform employs more than 5,700 people across 37 countries. Co-founder and CEO Melanie Perkins announced the decision in an internal memo, calling it the "most difficult moment" in Canva's 13-year history. As of now, the company has not disclosed which teams or locations are affected.

What exactly are laid-off employees getting?

The reported package includes:

• Six months of salary as severance pay
• 12 months of healthcare coverage
• One year of LinkedIn Premium subscription
• Permission to keep company-issued MacBooks
• Career coaching and professional transition support
• Removal of the equity vesting cliff
• A $10,000 fund for employees interested in starting their own businesses

Put in practical terms, a departing Canva employee gets half a year of runway on salary alone — plus health coverage that stretches a full year beyond the exit date, which matters most in markets where employer-linked healthcare dominates household budgets.

The removal of the vesting cliff is a notable detail. It means employees keep equity they would otherwise forfeit by leaving before a scheduled milestone — a benefit many laid-off tech workers elsewhere lose entirely.

Why is Canva cutting jobs now?

The layoffs come amid widespread AI-led disruption across the tech industry, and Canva's cuts are fueling the broader debate about AI's impact on the future of jobs. The company joins a wave of tech firms restructuring around AI, though the size of this reduction — more than one in five employees — places it among the sharper rounds this cycle.

In plain terms: even profitable, widely used design tools aren't insulated from AI-driven workforce reshaping, and 13-year-old companies are not too established to make deep cuts.

How are people reacting?

The package details went viral, and the response has been unusually warm for a layoff announcement.

"This is a masterclass in how to handle layoffs. Today, Canva CEO's announcement is next-level classy. Thoughtful, honest and generous. CEOs worldwide should take note!" wrote Knot Dating CEO Jasveer Singh in a LinkedIn post.

"We need more founders like thissss…," posted X user Shweta Kukreja on November 4, alongside details of the 22% cut.

Another X user, Thilak, struck the same note: "Sad to hear about Canva's layoff, but they handled it well. This sets an example for handling these situations for people who worked hard for the company."

Across platforms, commentators are calling for other companies to adopt a similar approach — one that prioritizes employee welfare even during cuts.

What does this mean for tech workers?

For individuals in the sector, the story cuts two ways. The bad news: AI-driven restructuring is now reaching design and creative-tool companies, not just software engineering teams, and a 22% cut at a 13-year-old firm shows no segment is safe. The useful news: severance terms are becoming a public benchmark. When one company offers six months of pay, a year of healthcare and vesting-cliff removal, candidates elsewhere can — and likely will — ask harder questions about exit terms before signing.

The public comparison of layoff packages is already happening, and Canva has just raised the reference point competitors will be measured against.