Design software maker Canva is cutting 22% of its staff, amounting to 1,271 people, amid a growth slowdown.

The company’s co-founder and CEO, Melanie Perkins, in a note to employees said while Canva has scaled so far, it needs to change to address slowing growth.

“Over the past thirteen years, we’ve turned a dream in a pitch deck into a platform used by hundreds of millions of people. None of it would have been possible without the talent, imagination, and care of every single person who has been part of this journey. Yet success in our first chapter doesn’t guarantee success in the next. This has been our hardest year yet, and as we shared earlier this year, our growth has slowed for the first time in a decade,” Perkins wrote.

Canva is reshuffling its organizational chart and merging its product, growth and platform teams to reduce communication friction. The company is also reducing “subspecialisation,” which means its employees might be asked to take up more responsibilities. The company is also moving towards hybrid work and asking people to work from an office a few days a week.

The company has been shipping its own AI models to reduce costs and reliance on third-party models, but it still had to cut its revenue growth forecast to 20% from 30% to address ballooning AI costs. This also resulted in Canva’s early investors cutting its valuation to about $35 billion earlier this year.

Canva is also facing increasing competition from AI startups and general-purpose chatbots like ChatGPT and Gemini, whose image generation capabilities allow people to easily put together posters and presentations.