Dunja Popovs woke up on Wednesday to the news that she was one of the 22 per cent of design software maker Canva’s workers losing their job.
asserted
she → wake → job
“Truthfully I am sad and devastated, but I’m also extremely grateful that I ever had the opportunity in the first place,” Popovs, who led a team of content designers at Canva, wrote on LinkedIn.
asserted
who → devastate → LinkedIn
Her plan for now is “a whole lot of gardening,” then start hunting for a new job.
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plan → start → job
Canva chief executive Melanie Perkins told staff on Wednesday that 1,271 people would be affected by a restructuring, aimed at resetting the business after growth started to slow this year.
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growth → tell → business
Some will lose their jobs.
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Some → lose → jobs
Others will be asked to relocate or will find their roles rewritten.
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roles → ask → ?
The timing was brutal: the news arrived a day after the Reserve Bank lifted rates to an 18-year-high.
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Bank → arrive → high
And anyone who has tried to get hired in tech knows not much happens between now and Australia Day.
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much → try → Day
The news took me back to April, when I saw Canva close its biggest product launch ever in a Los Angeles football stadium with engineers in gold plastic crowns playing Ode to Joy on instruments that included a rubber duck.
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that → take → duck
I asked co-founder Cliff Obrecht the question every Australian tech boss was getting that month.
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boss → ask → question
Atlassian, WiseTech and Telstra were cutting thousands of jobs, much of it put down to AI.
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much → cut → AI
“We do not have to do layoffs, and we don’t have any plans to do layoffs,” Obrecht said.
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Obrecht → have → layoffs
Canva’s headcount growth had slowed from 50 per cent a year to under 5 per cent, and he pitched that as the grown-up alternative to what everyone else was doing.
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everyone → slow → what
“Rather than this gas-on, hit-reverse, lay-off kind of mentality,” he said, “we’ve seen this coming, and we’ve just eased our foot off the accelerator.”
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we → gas → accelerator
I believed him, and so did plenty of the people who got the email on Wednesday.
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who → believe → Wednesday
One departing engineer described it as the “grim reaper of the tech world” arriving “a lot sooner than I thought it ever would”.
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it → depart → world
Most staff were surprised, he said.
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he → say → ?
To be fair to Obrecht, I think he meant every word.
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he → think → word
Canva had been profitable for nine straight years and had more than $US1.5 billion ($2.2 billion) in the bank.
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Canva → have → bank
It had never needed to do major layoffs.
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It → need → layoffs
Then the numbers turned, in large part due to the rapid rise of AI.
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numbers → turn → AI
In August, I reported that Canva had slowed that product launch because AI bills were eating its margins.
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bills → report → margins
“Historically, the cost to create a design cost us essentially nothing,” Obrecht said in August.
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Obrecht → create → August
“The cost of goods to serve a user has gone from cents per month to many, many more cents.”
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cost → serve → cents
Canva’s internal valuation of its business, used to price staff shares, tumbled as a result, and Perkins’ email confirmed growth slowed this year for the first time in a decade.
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growth → use → decade
She didn’t link the cuts directly to AI, but others are less sure the threat is temporary.
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threat → link → AI
Adam Barty, who runs Melbourne AI agency Revium, says it’s “pretty hard not to view AI as an existential threat to Canva’s core business model” - which is to give people who aren’t designers an easy way to make things for free, and convert enough of them into paying subscribers.
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who → run → subscribers
Some long-term users have moved their slideshows and social posts to AI chatbots, and barely open Canva anymore.
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users → move → Canva
For a decade, Canva has been the most successful story in Australian tech: a 19-year-old in Perth and her boyfriend, more than 100 investor rejections, then the most valuable start-up this country has produced.
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country → produce → Perth
Its co-founders are now billionaires and every pitch deck in Surry Hills borrowed a little of its shine.
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deck → borrow → shine
This setback is grim news for staff, but also for Australia’s venture capital sector, which has effectively been propped up by Canva’s outsized success.
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which → prop → success
Venture capital firm Blackbird owns about 10 per cent of Canva, and it has been a huge success for the firm, until now.
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it → own → firm
Airtree first invested in 2014 and has asked its own investors to keep its fund open until 2028 in the hope of a payday.
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Airtree → invest → payday
Behind both firms sit wealthy families, endowments and super funds.
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families → sit → firms
If Canva’s value keeps sliding, so does the case that backing Australian start-ups is a sound use of retirement savings.
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backing → keep → savings
Where things go from here is an open question - as is Canva’s very survival over the long term.
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survival → go → term
An IPO looks further off than ever.
asserted
IPO → look → ?
A sale to a global tech giant near Canva’s current value could be an option, and would be one of the biggest software deals ever done.
But there’s always a silver lining.
uncertain
sale → do → deals
When Google shut its Wave project (an attempt to build a social media platform for users to collaborate) in Sydney in 2010, a crop of talented engineers went looking for something new.
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crop → shut → something
One of them was Cameron Adams, who became Canva’s third co-founder.
asserted
who → become → them
…and 3 more, not listed.
The Aporia
