A profitable company just laid off more than 1,200 employees and, in the process, rewrote some expectations for how layoffs are supposed to work.
Canva, the Australian design software company valued in the tens of billions, confirmed it is cutting or relocating 1,271 roles as part of a broader restructuring. What's drawn attention isn't the headcount reduction itself — tech layoffs have become routine over the past three years — but the severance terms attached to it. Affected employees reportedly receive six months of pay, get to keep their company-issued MacBook, and are offered additional support that goes beyond the standard severance letter and box of belongings.
That last piece matters because most companies treat layoffs as a clean, fast exit. Severance tends to scale with tenure, often landing at two to four weeks per year worked, and hardware is typically collected, not gifted. Canva's package reportedly extends further, including support for employees whose visa status or relocation needs complicate a sudden job loss — a detail that stands out because immigration-related support is rarely part of layoff packages, even at well-resourced companies.
The layoffs come despite Canva remaining profitable, which is itself notable. Most large-scale cuts in tech over the past two years have been framed around cost discipline, investor pressure, or AI-driven restructuring following unprofitable growth. Canva's cuts appear tied to internal reorganization rather than financial distress, which changes how the severance terms read: a company with room to be more generous chose to be more generous.
Why it matters
Layoffs at profitable companies have become their own category over the past two years, distinct from the earlier wave of pandemic-era overhiring corrections. Companies including Google, Salesforce, and various AI-adjacent firms have cut staff while reporting healthy revenue, often citing restructuring around AI tools or shifting priorities rather than survival. Severance generosity in these cases varies widely, and Canva's package is being discussed partly because it breaks from the pattern of minimum-legal-requirement exits that have characterized much of this cycle.
There's also a recruiting angle. Companies that handle layoffs visibly well tend to protect their employer brand, which matters for attracting talent during the next hiring cycle. A severance package that gets covered favorably in the press costs money upfront but can reduce reputational damage that otherwise lingers for years.
What this means for small businesses
Most small businesses don't have Canva's balance sheet, and six months of severance per employee isn't realistic for a ten-person shop. But the underlying lesson — that how you handle an exit shapes your reputation long after the layoff — applies regardless of company size. Former employees talk, leave reviews on sites like Glassdoor, and sometimes become customers, referral sources, or future hires.
Small business owners who rely on contractors or software vendors should also watch how platform companies like Canva handle internal disruption, since restructuring at a tool provider can sometimes precede pricing changes, feature shifts, or slower support as teams get reshuffled. If your business leans on Canva or similar design tools, it's worth checking whether support response times or product roadmaps shift in the coming months.
Finally, this is a useful moment to audit your own offboarding process, even informally. Clear communication, a reasonable timeline, and basic dignity in an exit cost little and tend to pay off in word-of-mouth reputation, particularly in smaller and tighter-knit local markets.
What to watch
Track whether other profitable software or design companies follow with similar restructuring announcements in the coming months, and whether severance terms across the industry start trending upward or downward as a result. Also worth watching: whether Canva's reorganization affects product updates, pricing tiers, or customer support responsiveness over the next two quarters.
The bottom line
Canva's layoffs show that severance packages at profitable companies can go well beyond legal minimums, and the terms offered here are already being referenced as a comparison point for future layoff announcements across the industry.