Canva cuts 1,271 jobs (22%) after free users' AI usage drove up costs
aakashgupta · x · 2026-11-05
Canva laid off 1,271 people — about 22% of its 5,800 workforce — months after free users flooded into its new AI tools, with every prompt costing real money. CEO Melanie Perkins called it "the hardest moment in our thirteen-year history," telling staff growth had slowed for the first time in a decade.
Key numbers:
- 265M+ monthly users, only 31M paying — roughly 1 in 9 users footing the bill for the other 8
- AI usage far exceeded forecasts, mostly from free-plan users
The article's core point: Canva's template business had near-zero marginal cost, so the freemium ratio worked for years. Generative AI broke that model — free users became a cost center instead of a growth asset, triggering the cuts.
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