Latest / The Front / Billionaire’s brutal Canva shakeup: 1200 out, everyone else back in

Transcript

Billionaire’s brutal Canva shakeup: 1200 out, everyone else back in · The Front

• 0:03
  Speaker 1: From The Australian, here's what's on the front. I'm Claire Harvey.
• 0:06
  Speaker 1: It's Thursday, November 5, 2026. When a billionaire tech unicorn
• 0:14
  Speaker 1: suddenly sacks 1,200 people and orders the rest back to
• 0:17
  Speaker 1: the office, it feels like spin to call it a.
• 0:20
  Speaker 2: Re-founding, right?
• 0:22
  Speaker 1: But that's the approach chosen by one of Australia's most
• 0:25
  Speaker 1: celebrated businesswomen, Melanie Perkins.
• 0:28
  Speaker 2: So is it just spin? Is working from home over?
• 0:32
  Speaker 1: Is our tech sector in serious strife? Today, our John
• 0:36
  Speaker 1: Stenzold is here to dig behind the PR guff and
• 0:40
  Speaker 1: work out what is really going on. Melanie Perkins, the
• 0:57
  Speaker 1: co-founder of Canva, one of Australia's most exciting technology start-ups,
• 1:03
  Speaker 1: has written a memo to staff in which she talks
• 1:06
  Speaker 1: about not restructuring, not resizing, refounding the business.
• 1:12
  Speaker 2: Along the way, 1,200 people are going to lose their jobs.
• 1:14
  Speaker 1: That's 20% or so of the organisation's workforce. Canva, which
• 1:19
  Speaker 1: currently operates in 37 countries, has said new technology has
• 1:23
  Speaker 1: changed how consumers react use its products. My immediate thought
• 1:28
  Speaker 1: about this, and let's get into everything that Melanie Perkins
• 1:31
  Speaker 1: talks about, is this just the new kind of corporate
• 1:34
  Speaker 1: euphemism for sacking people?
• 1:37
  Speaker 3: Oh, look, I think it's the end of the innocence
• 1:39
  Speaker 3: in a way for Canva. It was such a lauded brand.
• 1:42
  Speaker 3: Melanie and her husband, Cliff Obrecht, were these lauded tech
• 1:45
  Speaker 3: entrepreneurs here in Australia. They were put up as heroes
• 1:48
  Speaker 3: of the Australian business scene. They achieved so much so early.
• 1:51
  Speaker 3: The company was valued at $ 40 billion. I mean, that's
• 1:54
  Speaker 3: incredible for an Australian startup to achieve that while these
• 1:58
  Speaker 3: two were still in their 30s, right?
• 2:00
  Speaker 4: So now Canva's being used by 165 million people in
• 2:03
  Speaker 4: pretty much every country around the world, and it's growing
• 2:07
  Speaker 4: extraordinarily rapidly. Something that we've been also really intentional about
• 2:10
  Speaker 4: is dreaming big. And so one of our values at
• 2:14
  Speaker 4: Canva is to set crazy big goals and make them happen.
• 2:17
  Speaker 3: So the company grows. They probably miss an opportunity to
• 2:21
  Speaker 3: float on a stock exchange in hindsight probably a couple
• 2:24
  Speaker 3: of years ago. And now we get to this stage. So, look,
• 2:27
  Speaker 3: it is– there's cracks appearing. AI is coming really fast.
• 2:31
  Speaker 3: Canva was the poster child, the poster couple, whatever you
• 2:34
  Speaker 3: want to call it, for our Aussie tech scene. All
• 2:37
  Speaker 3: these venture capitalists made so much money on paper from it,
• 2:40
  Speaker 3: and now here we are.
• 2:41
  Speaker 5: I mean, it's really tough. It is the end of
• 2:44
  Speaker 5: the beginning.
• 2:44
  Speaker 6: In a way.
• 2:48
  Speaker 2: Canva was the OG disruptor.
• 2:50
  Speaker 1: It came in and made graphic design something that nobody
• 2:52
  Speaker 1: would employ anyone to do, really.
• 2:55
  Speaker 2: Suddenly, everyone can be a graphic designer.
• 2:57
  Speaker 1: You and I can be designing our own birthday party
• 2:59
  Speaker 1: invitations or posters or graphics for the newspaper. I should
• 3:03
  Speaker 1: point out that we still use graphic designers, professionals to
• 3:06
  Speaker 1: do those things for us. But that's not the case
• 3:09
  Speaker 1: in companies across the Australian economy and around the world. Now,
• 3:14
  Speaker 1: Canva is being disrupted itself, of course, by AI and
• 3:17
  Speaker 1: everything else. But Melanie Perkins' memo doesn't really explicitly mention
• 3:21
  Speaker 1: AI and she's not blaming AI for these job cuts.
• 3:25
  Speaker 2: Is that legit?
• 3:27
  Speaker 5: She talks around it in a way.
• 3:28
  Speaker 3: It was more like about the technological changes that were
• 3:31
  Speaker 3: happening everywhere, if that makes sense. So I think it's
• 3:34
  Speaker 3: pretty clear that, say, what else is going on that's
• 3:37
  Speaker 3: going to change things so rapidly, right? I mean, it's
• 3:39
  Speaker 3: actually a bit strange and a bit on brand that
• 3:43
  Speaker 3: she's avoided using that. I think that she sees an
• 3:45
  Speaker 3: extremely nice founder in that way, whereas Cliff was the
• 3:49
  Speaker 3: guy that probably– uh, was a bit tougher internally. Now,
• 3:53
  Speaker 3: whether that's true or not, I mean, it's probably not
• 3:55
  Speaker 3: the case, right? You don't get to become a successful
• 3:58
  Speaker 3: entrepreneur like she and they have without, you know, being
• 4:01
  Speaker 3: pretty ruthless.
• 4:02
  Speaker 5: In, in many ways. But the language that she's used
• 4:05
  Speaker 5: in that way that other.
• 4:06
  Speaker 3: Times where she's sort of used, you know, Canva, um,
• 4:10
  Speaker 3: animation or figures to announce things internally does paint that
• 4:13
  Speaker 3: really nice picture of her.
• 4:14
  Speaker 5: And let me offer an interesting contrast for you, Claire.
• 4:17
  Speaker 3: So she puts out the announcement and there's all these
• 4:20
  Speaker 3: messages replying to her LinkedIn message saying, you know, look,
• 4:24
  Speaker 3: this is great how you've messaged this. It's incredible that
• 4:27
  Speaker 3: you've got ahead of the curve and done this. And
• 4:29
  Speaker 3: just to remember that the reaction to Mike Cannon-Brooks at
• 4:33
  Speaker 3: Atlassian was Earlier this year, last year as well, there
• 4:37
  Speaker 3: was 1,500 job cuts in a day and he was
• 4:40
  Speaker 3: absolutely slagged off for the way that he was wearing
• 4:43
  Speaker 3: a hoodie and his video announcement, looking not really, I suppose,
• 4:49
  Speaker 3: happy to be doing it. It's the simple video message
• 4:53
  Speaker 3: that landed in staff inboxes this morning, telling 1,600 Atlassian
• 4:58
  Speaker 3: employees they're being let go.
• 5:02
  Speaker 6: I am deeply sorry for the disruption this creates in
• 5:05
  Speaker 6: your life. Even at a moment like this, and especially
• 5:09
  Speaker 6: at a moment like this, your impact.
• 5:12
  Speaker 5: And contributions matter here massively.
• 5:16
  Speaker 6: Your work will live on in our products, in the
• 5:18
  Speaker 6: experience of our customers, and in the culture that you've
• 5:21
  Speaker 6: helped us build and create.
• 5:24
  Speaker 5: I mean, obviously it wasn't a happy time, but didn't
• 5:26
  Speaker 5: Peter be nice about it?
• 5:28
  Speaker 3: So he gets absolutely slammed for his reaction and people
• 5:31
  Speaker 3: are saying all these really nice things about Mel. I mean,
• 5:34
  Speaker 3: they've both done pretty much the same thing here, right?
• 5:37
  Speaker 3: So I'm quite interested in that.
• 5:39
  Speaker 1: It's really interesting, especially when we often hear in the
• 5:43
  Speaker 1: public kind of discourse, oh, women, business people can't do
• 5:46
  Speaker 1: anything right and they're criticised for their clothes and they're
• 5:49
  Speaker 1: criticised for their hair and there's gendered critique of them.
• 5:52
  Speaker 2: In fact, you're right.
• 5:54
  Speaker 1: When Mike Cannon-Brooks did this wearing a hoodie and in
• 5:56
  Speaker 1: his T-shirt at home with his man bun and kind
• 5:58
  Speaker 1: of looking sad, the critique was all about the look
• 6:02
  Speaker 1: and not really about the substance. They're kind of the
• 6:05
  Speaker 1: same thing. She's written a nice statement, distributed it to Canva,
• 6:07
  Speaker 1: chucked it on LinkedIn.
• 6:09
  Speaker 2: Is that one of the problems?
• 6:10
  Speaker 1: We're getting into a sidetrack here, but, I mean, LinkedIn
• 6:13
  Speaker 1: is notorious for this ludicrous kind of sucking up that
• 6:17
  Speaker 1: people do. I mean, it's this weird world that these
• 6:22
  Speaker 1: billionaires live in, isn't it?
• 6:24
  Speaker 2: Well, it is.
• 6:24
  Speaker 5: And absolutely.
• 6:25
  Speaker 3: And look, really, that reaction to Mel does go to
• 6:27
  Speaker 3: what you say about LinkedIn usually. Although if you remember
• 6:30
  Speaker 3: when Mike also put up the LinkedIn post about him
• 6:33
  Speaker 3: buying a corporate jet, he was absolutely slammed for that
• 6:36
  Speaker 3: on LinkedIn. So not everything's positive on that, but yeah,
• 6:39
  Speaker 3: usually it is. And maybe that's the method in the
• 6:40
  Speaker 3: madness in terms of getting that message out there. It
• 6:43
  Speaker 3: went to a friendly place. There's no video about it.
• 6:45
  Speaker 3: And by the way, Mel and Cliff have... said that
• 6:49
  Speaker 3: they won't be talking to an all staff meeting until
• 6:52
  Speaker 3: next week. I mean, that's leaving in a long time
• 6:54
  Speaker 3: to have to deal with the people that you're effectively sacking. Now,
• 6:57
  Speaker 3: obviously there's been some sweeteners that they've said along the
• 7:00
  Speaker 3: way in terms of, you know, payouts and benefits that
• 7:03
  Speaker 3: staff will.
• 7:03
  Speaker 5: Get, but it is a very, I feel like there's
• 7:07
  Speaker 5: a little bit of.
• 7:08
  Speaker 3: Like protecting of one's brand or one's reputation going on
• 7:11
  Speaker 3: here too. You're sacking a lot of people here at
• 7:13
  Speaker 3: the end of the day, but trying to look nice
• 7:15
  Speaker 3: about it.
• 7:16
  Speaker 5: Yeah. Yeah.
• 7:17
  Speaker 1: I mean, I could have helped them with a video
• 7:19
  Speaker 1: because I learned to edit video on Canva.
• 7:20
  Speaker 2: I taught myself how to move the little sliders.
• 7:22
  Speaker 1: And that was the incredible thing about it, that someone
• 7:25
  Speaker 1: like me, a journalist, can learn how to be a
• 7:27
  Speaker 1: video editor.
• 7:28
  Speaker 2: Admittedly, I'm not very good, but at least I could.
• 7:31
  Speaker 1: Do it and I could make videos of my children
• 7:33
  Speaker 1: and videos for work and whatever. That is partly what
• 7:37
  Speaker 1: has fueled this sort of hyper growth narrative of Canva
• 7:40
  Speaker 1: over the past decade or so. Melanie Perkins mentions that
• 7:44
  Speaker 1: the past year has been the worst for growth in
• 7:46
  Speaker 1: Canvas history, but there's no numbers in this memo. What
• 7:49
  Speaker 1: is actually going on?
• 7:51
  Speaker 3: Well, the only numbers that have sort of floated out there,
• 7:54
  Speaker 3: and it's, you know, from sources and so on, is
• 7:56
  Speaker 3: revenue targets, right? So it was about the revenue targets
• 7:59
  Speaker 3: this year were, or growth targets were at roughly 20%
• 8:02
  Speaker 3: year on year, right? Which is pretty aggressive when you
• 8:05
  Speaker 3: think about it. But it also, you know, chimed in
• 8:07
  Speaker 3: with whatever they've achieved previously. Their growth targets, in overall
• 8:11
  Speaker 3: numbers has been fantastic. Now, profits are a different thing, right?
• 8:14
  Speaker 5: So we could get to that if you like.
• 8:15
  Speaker 3: But when even the revenue figures were flat at best,
• 8:20
  Speaker 3: and that's what's happened here, even when there was no
• 8:23
  Speaker 3: more income coming in than there was year on year,
• 8:25
  Speaker 3: then that's when alarm bells have clearly rung internally. If
• 8:28
  Speaker 3: we can't keep up that incredible top line growth at Canva,
• 8:32
  Speaker 3: which is what they've had for a long time now,
• 8:34
  Speaker 3: then there's clearly something going on. And that something is
• 8:37
  Speaker 3: AI and the threat that could prove to their fantastic products.
• 8:41
  Speaker 3: And people might just use AI to do whatever we do,
• 8:44
  Speaker 3: those birthday cards and so on. So look, clearly that
• 8:47
  Speaker 3: growth is finished. Then they have to cut their cloth accordingly.
• 8:50
  Speaker 3: And that's where your job cuts come in and all
• 8:51
  Speaker 3: these other things. Look, They were that sort of almost typical,
• 8:54
  Speaker 3: you know, big tech success story in many ways. They
• 8:58
  Speaker 3: had all the bells and whistles, you know, the staff entitlements.
• 9:01
  Speaker 3: They're building a big building, a big new headquarters in Sydney,
• 9:04
  Speaker 3: just around the corner from the Atlassian Tower as well, famously.
• 9:08
  Speaker 3: Spent a lot of money on that. So, you know,
• 9:10
  Speaker 3: there's things like that. What happens to that now? There's
• 9:12
  Speaker 3: an half-empty building for Canva staff coming. I mean, there's
• 9:15
  Speaker 3: so many question marks over this business now. And look,
• 9:19
  Speaker 3: it's the end of the innocence, as I said previously.
• 9:25
  Speaker 1: Mel Perkins and Cliff Obrecht, though, presumably are still going
• 9:27
  Speaker 1: to be very close to the top of your Riches
• 9:29
  Speaker 1: 250 list, aren't they? Is this going to affect their
• 9:32
  Speaker 1: personal wealth?
• 9:34
  Speaker 5: Oh, look, I mean, they've been top 10 for quite
• 9:36
  Speaker 5: a few years now.
• 9:37
  Speaker 3: But I mean, straight away, look, there's already been a 25% haircut,
• 9:41
  Speaker 3: I think, in the valuation in recent months. So what
• 9:45
  Speaker 3: happens between now and mid to end of March 2027,
• 9:49
  Speaker 3: when we publish our next edition of I mean, there's
• 9:53
  Speaker 3: got to be massive question marks on that valuation.
• 9:56
  Speaker 5: Now, there's no way it can be where it is.
• 9:58
  Speaker 3: Which is roughly, supposedly... roughly the US $ 33 billion or
• 10:01
  Speaker 3: so on paper. I mean, I think you could probably
• 10:04
  Speaker 3: take a third of that. Maybe you could take a
• 10:06
  Speaker 3: half of that. I mean, these valuations are moving around really,
• 10:09
  Speaker 3: really quickly. And it doesn't mean that you can't recover
• 10:12
  Speaker 3: from And I think some of that future recovery in
• 10:15
  Speaker 3: the valuation will come if they're profitable rather than that
• 10:18
  Speaker 3: revenue growth, which is something that valuers relied on for
• 10:20
  Speaker 3: so long.
• 10:22
  Speaker 1: Tucked inside this memo is a return to work mandate.
• 10:27
  Speaker 1: So people who previously had hybrid roles or, you know,
• 10:30
  Speaker 1: who were allowed to kind of work from anywhere and
• 10:32
  Speaker 1: it's all distributed and, you know, we're agile are now
• 10:35
  Speaker 1: told to be back in the office.
• 10:38
  Speaker 2: What does that mean? And where does it leave the
• 10:40
  Speaker 2: rest of the economy? It's not the only company doing this.
• 10:43
  Speaker 1: Did these kind of tech companies create this expectation that
• 10:46
  Speaker 1: you don't actually have to show up to work, lumber
• 10:49
  Speaker 1: the rest of the economy with that, and now they're
• 10:51
  Speaker 1: trying to back away from it?
• 10:52
  Speaker 5: Yeah, absolutely. And look, some of that's for real estate reasons, Claire.
• 10:56
  Speaker 3: I mean, as I said, they paid about somewhere between
• 10:59
  Speaker 3: $ 120 and $ 130 million.
• 11:00
  Speaker 5: Canva did, right?
• 11:01
  Speaker 3: So for this building in Sydney's Surrey Hills- a few
• 11:05
  Speaker 3: years ago, 2022. In those times, they were absolutely growing spectacularly.
• 11:09
  Speaker 3: So a bio building, they're revamping it at the moment, spending,
• 11:13
  Speaker 3: I think it's something like, you know, $ 15 odd million
• 11:16
  Speaker 3: at the very, very least from the documents that I've
• 11:18
  Speaker 3: had a quick look at to sort of ascertain that.
• 11:20
  Speaker 5: Beautiful rooftop area, probably barbecue facilities.
• 11:23
  Speaker 3: There's going to be great sort of Canva graphics on
• 11:25
  Speaker 3: the front of the building at ground level.
• 11:27
  Speaker 5: You'll be able to walk past it, Claire. So I
• 11:29
  Speaker 5: guess they've got to fill it, right? They have to
• 11:31
  Speaker 5: fill it. They own the building.
• 11:33
  Speaker 3: I mean, is it going to be like Atlassian around
• 11:36
  Speaker 3: the corner where they're probably going to have to sub-lease
• 11:39
  Speaker 3: some of the plans?
• 11:40
  Speaker 5: The Canva sign is going to be on that building.
• 11:43
  Speaker 3: It's an old-fashioned approach to a new-age technological company for
• 11:46
  Speaker 3: it to be full of people.
• 11:47
  Speaker 5: Working there all of a sudden.
• 11:49
  Speaker 3: But look, I think it's about 10 floors. But if
• 11:52
  Speaker 3: you're cutting sort of 22% of your workforce, you could
• 11:55
  Speaker 3: question whether that's actually going to be full at all.
• 12:01
  Speaker 1: I mean, does it blow up the idea that productivity
• 12:04
  Speaker 1: isn't affected by working from home? Because Australians love it. And,
• 12:07
  Speaker 1: you know, you talk to individual workers and they say, yeah,
• 12:10
  Speaker 1: I mean, it has changed my life. I can actually
• 12:12
  Speaker 1: see my children. I get a lot more done from home.
• 12:15
  Speaker 1: You don't hear many bosses saying that, though.
• 12:17
  Speaker 3: No, look, you know, in a different city, I'm in Melbourne,
• 12:21
  Speaker 3: and the situation with the vacancy rates or the amount
• 12:25
  Speaker 3: of foot traffic that's coming to the CBD is less
• 12:27
  Speaker 3: than there is in Sydney, for example, where Canberra is.
• 12:30
  Speaker 3: pretty close to Sydney Central Station. So it's pretty handy
• 12:32
  Speaker 3: on the public transport links for Canva staff who will
• 12:35
  Speaker 3: be coming back.
• 12:35
  Speaker 5: But yeah, look, again, I think it's the end of
• 12:38
  Speaker 5: that innocence.
• 12:38
  Speaker 3: There is a realisation that, you know, we couldn't necessarily
• 12:42
  Speaker 3: change the world as they thought they could a few
• 12:44
  Speaker 3: years ago when it comes to staffing matters. And yeah,
• 12:47
  Speaker 3: it turns out that even if you're using collaborative software
• 12:50
  Speaker 3: or software to do things, it's good for everyone to
• 12:52
  Speaker 3: be in the office talking to each other every so often, right? Yeah.
• 12:55
  Speaker 1: Well, the people who are leaving are going to be
• 12:56
  Speaker 1: allowed to keep their MacBooks, which I thought was fairly
• 12:59
  Speaker 1: cold comfort, John.
• 13:00
  Speaker 2: But I think this story will keep breaking. So thank
• 13:02
  Speaker 2: you very much.
• 13:03
  Speaker 5: Thanks, Clare.
• 13:12
  Speaker 1: John Stenzel edits The List, Australia's richest 250. John and
• 13:16
  Speaker 1: all the rest of Australia's best business journalists work for
• 13:19
  Speaker 1: The Australian.
• 13:20
  Speaker 2: You can check out their work anytime at theaustralian.com.au.