Canva will cut jobs and restructure its business in a shake-up affecting 22% of its workforce, co-founder and chief executive Melanie Perkins told staff on Wednesday. Altogether, 1,271 people will lose their jobs, be asked to relocate or move into new roles.

Perkins called the decision “without doubt the hardest moment in our thirteen-year history” and said the past 12 months had been “our hardest year yet, and as we shared earlier this year, our growth has slowed for the first time in a decade.” She described it as an “incredibly hard decision” that would bring “significant changes” to the company.

“For some people, this will mean changes to their roles or being asked to relocate to centralised hubs,” wrote Perkins. “Sadly, it will also mean saying goodbye to teammates and friends who have helped build Canva into what it is today.”

The Australian company, which employs staff in 37 countries, said Sydney would become the “primary home” for more of its product teams. From next year, hybrid workers will be expected to spend two to three days a week in the office.

The restructuring follows a reported fall in Canva’s value over the past year, tied to concerns about the effect of artificial intelligence on its business and the cost of building the technology into its platforms. Two of its backers, Blackbird Ventures and Airtree, reportedly cut its valuation from A$60bn ($41.8bn; £31.1bn) at the end of last year to about A$49bn. Canva is also reported to have cut its own internal valuation as AI expenses rose with the rollout of new products.

“New technology is transforming what people can create, how they create it, and what they expect from the products they use,” Perkins said in her note.

Perkins left university at 19 to found her first venture and launched Canva in 2013. The company offers templates and tools that let users without technical or design backgrounds produce professional-looking graphics and presentations, from wedding invitations to business pitch decks.